Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Day (May 2021)
138 slides from Fletcher Building's investor day presentation, May 26, 2021
Slide 1: Fletcher Building Investor Day May 2021
Fletcher Building Investor Day May 2021 26 May 2021
Slide 2: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 3: Welcome and introduction
Welcome and introduction Section Presenter AEST / NZT 1. Introduction, Fletcher Building Overview Ross Taylor 9:00am / 11:00am 2a. Group Financials Bevan McKenzie 9:20am / 11:20am 2b. Q+A Ross Taylor and Bevan McKenzie 9:40am / 11:40am 3. Safety Wendi Croft 10:00am / 12:00pm 4. Building Products Ham
Slide 4: Presentations from our Executive Team members
Presentations from our Executive Team members Operational Heads presenting HAMISH BRUCE NICK STEVE PETER DEAN McBEATH McEWEN TRABER EVANS REIDY FRADGLEY Chief Executive Chief Executive Chief Executive Chief Executive Chief Executive Chief Executive Building Products Distribution Concrete Residential
Slide 5: Adjustment of viewing panes and Q&A functionality
Adjustment of viewing panes and Q&A functionality If you are using a desktop, you can resize any of the viewing panes by grabbing the edge and making it bigger or smaller. You can also move any windows in the same way To send in a question, simply click the “Q&A” tab, type your question and then pre
Slide 6: Mobile device Q&A functionality
Mobile device Q&A functionality If you are using a mobile device, tab the menu icon at the top left hand corner to open the panel and tab the “Q&A” icon Enter your question into the text box and tab “New Question” 6 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 7: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 8: Total FB Revenue
Significant NZ and Australia player, focused in the building products and distribution sectors People: c.14,500 External Revenue: NZD c.$8.0 billion NZX/ASX listed: FBU New Zealand Australia South Pacific c.9,100 people c.4,600 people c.800 people External Revenue FY21F $5.2b $2.8b $0.1b NZ Resident
Slide 9: Leading NZ sector exposures with strong market positions and brands
Leading NZ sector exposures with strong market positions and brands New Zealand Market share Sites Gross Revenue Brands Building Products 32%1 c.65 $1.4b 140 points Distribution 20%1 of presence $1.7b Concrete 38%1 c.100 $0.8b #2 largest Residential & Auckland homebuilder Christchurch $0.7b Developm
Slide 10: Australia position smaller but scale in specific sectors
Australia position smaller but scale in specific sectors Australia Market share Sites Gross Revenue Brands Building Products 29%1 74 $2.8b Distribution 19%1 221 10 Fletcher Building Limited Investor Day Presentation | © May 2021 1. Estimates based on the markets in which we participate, e.g. Plumbin
Slide 11: Having reset the business, delivering performance in FY21
Having reset the business, delivering performance in FY21, we are strongly positioned for ongoing performance and growth FY19 FY20 FY21 FY22 FY23+ Refocus & stabilise Set up for Performance Ongoing performance & growth performance 11 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 12: Our strategy is aligned to this next phase of ongoing performance & growth
Our strategy is aligned to this next phase of ongoing performance & growth Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Mar
Slide 13: Focus on achieving our vision, anchored by our purpose and values
Focus on achieving our vision, anchored by our purpose and values Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Market leadi
Slide 14: Our strategic goals driving us to achieve performance and growth
Our strategic goals driving us to achieve performance and growth Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Market leadin
Slide 15: Our people are integral to delivery of our strategy
Our people are integral to delivery of our strategy Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Market leading customer Ze
Slide 16: Key group measures are aimed to deliver financial and non-financial performance
Key group measures are aimed to deliver financial and non-financial performance and growth Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovatio
Slide 17: Confident this strategy positions us well to drive shareholder value
Confident this strategy positions us well to drive shareholder value in the short- and long-term 01 02 03 04 05 Focus Strong Significant Global and Well-positioned financial near-term regional for long-term positioning “self-help” macro trends and sustainable value creation are supportive growth opp
Slide 18: NZ markets look favourable and "stronger for longer"
NZ markets look favourable and “stronger for longer” NZ Historical and Forecast NZ Historical and Forecast Residential WPIP ($b) 4.0 GDP • Strong economic backdrop 17.5 17.8 17.7 • Ongoing structural undersupply of housing in 15.6 15.2 2.0 NZ (housing undersupply of 40,000 dwellings) • Growing popul
Slide 19: Australia macro backdrop supportive for growth
Australia macro backdrop supportive for growth AU Historical and Forecast AU Historical and Forecast Residential Work Done (A$b) 8.0 GDP • Strong economic backdrop 80.6 72.8 75.3 75.7 76.6 4.0 • Government stimulus driving home building 0.0 • Low term deposit interest rates and low -4.0 borrowing ra
Slide 20: FY21 Forecast and share buyback
FY21 Forecast and share buyback Strong earnings growth and improved profitability, EBIT at top end of guidance range, on-market share buyback of up to $300m ➔ Solid revenue of approximately $8b, trading conditions in 2H21 broadly consistent with 1H21 ➔ Forward indicators point to ongoing robust volu
Slide 21: Near-term outlook
Near-term outlook Driving growth through operational improvement & growth initiatives, well-positioned through to FY23+ Pathway to c.10% EBIT margin in FY23 Positioned for earnings growth to FY23 and beyond 1. Australia margins lift to 5-7% on continued improvement in ➔ Investing for growth through
Slide 22: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 23: Overview
Overview Material progress on key financial targets, strong balance sheet, well-positioned for shareholder returns Focus Progress ➔ +100bps margin FY19-21F Margins ➔ EBIT margin1: target >10% ➔ Path to c.10% in FY23 Investment ➔ Base capex: sustainable average of $200-250m p.a. ➔ Base capex down fro
Slide 24: Margins
Margins 100bps improvement in EBIT margin since FY19, path to c.10% in FY23 EBIT Margin1 (%) Pathway to 10% in FY23 1. Australia margins lift from c.3.5% in FY21F to 5-7% on c.10% continued improvement in operating disciplines and growth c.8.2% initiatives 7.2% 2. Construction margins lift from c.2%
Slide 25: Margins
Margins Efficiency programs have delivered material cost reductions, especially in Core Divisions; focused on driving additional operating leverage off this base Core Divisions: Overhead Costs % of Revenue1 ➔ Efficiency programs commenced in FY18: focused initially on Australia, then on New Zealand
Slide 26: Investment
Investment Base capex expected to average $200-250m p.a. in FY22-FY24 Base Capex Average Spend p.a. Focus Areas ➔ Maintenance investment compares to depreciation (excl. ROU1) of c.$180m p.a. Maintenance $150-200m ➔ Includes ongoing investment to create fit-for-purpose systems environment, c.$25-40m
Slide 27: Investment
Investment New WWB plant replaces end-of-life asset and provides growth capacity NZ Plasterboard Consumption (m2) vs. Population (m) WWB Investment Phasing ($m) 6,000 35,000 ➔ New plant near Tauranga provides 30Mm2 c.220 North Island capacity (currently 20Mm2) 30,000 5,000 ➔ Maintenance investment t
Slide 28: Investment
Investment Residential & Development scaling to c.1,000 houses p.a. and proving out growth opportunities – expect funds invested to build from c.$560m currently to c.$750m in FY22 Residential and Development Funds Invested: FY21F-22F ($m) Key: FY21F c.750 ➔ Base housing business – scale to c.1,000 u
Slide 29: Investment
Investment We are making targeted OPEX spend to support delivery of organic growth initiatives OPEX on Key Initiatives (incremental to FY21 base) Spend p.a. Timing Core Divisions1 – product adjacencies, c.$10-20m FY22-FY23 decarbonisation, customer ecosystems ➔ Targeted investment of c.$30-40m p.a.
Slide 30: Return on investment
Return on investment Currently exceeding 15% ROFE target – expect to continue to do so as funds base lifts on investments in growth and WWB plant ROFE1 (%) and Closing Operating Funds ($b) ➔ ROFE1 target of >15% through-the-cycle, also acts as hurdle for growth investments c.18% > 15% ➔ FY21 ROFE we
Slide 31: Cash flow
Cash flow Working capital target of 5-day improvement in Core Divisions delivered ahead of plan Working Capital1 Receivables & Inventory – Core Divisions (days) ➔ Target set in FY18 was to reduce Core working capital by 5-days by FY23, through improved stock & receivables 116 c.110 management. Credi
Slide 32: Cash flow
Cash flow Underlying cash generation of the business has been strong Underlying Trading Cash-Flow1 ($m) ➔ Group cash generation has been strong: total of c.$2.0b underlying trading cash-flow1 in FY19-FY21 850-900 ➔ Strong underlying cash conversion2 of c.85% in FY19-FY21 – driven by working capital
Slide 33: Funding
Funding Drawn debt and funding costs have reduced materially, while maturity and liquidity profiles remain strong Debt drawings ($m) Debt maturity profile ($m) ➔ Gross debt reduced by c.$1b since Jun-18 1,877 14 94 97 ➔ Funding costs reduced from $155m in FY18 to c.$50m in FY21 ➔ Robust maturity pro
Slide 34: Leverage
Leverage Strong balance sheet, well-positioned to support continued execution of strategy Leverage (Net Debt / EBITDA) ➔ Cash generation has supported strong balance sheet position and a sustained reduction in leverage 2.0x ➔ Investments in FY22-23 in the WWB plant, Core growth Target range capex, a
Slide 35: Capital return
Capital return With the balance sheet materially de-levered, FBU intends to conduct an on-market share buyback of up to NZ$300m over the next 12 months ➔ Fletcher Building continuously assesses its balance sheet position and investment opportunities in order to drive shareholder returns ➔ Where ther
Slide 36: Dividends
Dividends FY21 interim paid and final FY21 dividend expected, targeting a pay-out ratio of 50-75% of net earnings; imputation expected from FY22 ➔ Policy to pay dividends in the range of 50-75% of net earnings before significant items and having regard to available cash flow ➔ HY21 interim dividend
Slide 37: FY21 EBIT Guidance
FY21 EBIT Guidance Expected to be $650-665m, at top end of the prior guidance range Division FY21F EBIT1 ➔ FY21 EBIT before significant items expected to be $650-665m (previously $610- Building Products $190-195m 660m). Updated guidance equates to c.49/51% H1/H2 split Distribution $125-130m ➔ Tradin
Slide 38: Summary
Summary Material progress on key financial targets, strong balance sheet, well-positioned for shareholder returns ➔ +100bps margin improvement since FY19, driven particularly by targeted efficiency programs Margins ➔ Path to c.10% margin in FY23 Investment ➔ Base capex $200-250m p.a., residential in
Slide 39: Questions
Questions 39 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 40: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 41: Safety is a key element of our Strategy
Safety is a key element of our Strategy Safety Total Recordable Injury Serious Injuries2 ➔ ‘Protect’ safety programme to realise a future Frequency Rate1 where zero injuries everyday is possible 33 10.7 ➔ Current focus is on critical risks, high potentials, and resetting culture & behaviours 8.5 21
Slide 42: The five pillars of our Protect strategy
The five pillars of our Protect strategy SHIFT DEVELOP ENABLE MANAGE DRIVE MINDSETS LEADERS FRONTLINE CRITICAL RISKS ACCOUNTABILITY 42 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 43: Fletcher Building Limited Investor Day Presentation | © May 2021
43 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 44: Questions
Questions 44 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 45: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 46: Building Products
Building Products The leading New Zealand building products solutions provider ➔ Market leading building products brands for the finishing trades with world leading technical product knowledge ➔ Integrated value chain in pipes, servicing a wide range of customers ➔ Balanced portfolio of Steel busine
Slide 47: Building Products
Building Products We have an unrivalled network across New Zealand Enough pipes p.a. to circumnavigate the globe 240 tonnes p.a. 1,900 of milk bottles recycled People Equivalent of 5,000 homes of glass recycled every year 2.25 Mm2 of particle board 47 Fletcher Building Limited Investor Day Presentat
Slide 48: Building Products market share
Building Products Leading market positions across the building products, pipes and steel verticals Market Size ($b) and Share (%) HY21 Revenue Weighted Sector Exposure $1.3b $0.6b $2.1b 100% 28% 46% Market share % 26% Key: Residential Non Residential Infrastructure / Other Products Pipes Steel Key:
Slide 49: Building Products
Building Products Business strategies and cost bases reset, c.14% EBIT margin sustainable EBIT ($m)1 EBIT Margin1 (%) and ROFE2 (%) Key Non-financial Measures FY19 YTD21 c.25.2% 24.0% $190-195m TRIFR3 6.4 7.6 $167m NPS 35 46 Engagement 72% 73% c.14.0% 12.7% Carbon (‘000t)4 62 50 FY19 FY21F FY19 FY21
Slide 50: Building Products
Economic Building Products Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Investing in the foundations for future growth services industry top quartile disruption Automation ➔ Automation of manufact
Slide 51: Building Products
Building Products Leadership in innovation, Lowest sustainability, delivered cost and growth via Strong focus on efficient sites and new product development disruption Automation of manufacturing and supply chain Programme of new product development – Laminex • TINZ Bagger and Bag Placer • Productiv
Slide 52: Building Products
Building Products Lowest delivered cost A simplified distribution business and a low cost, efficient manufacturing footprint FY21 FY23 14 Distribution Sites 2 Pipe Manufacturing Plants 3 Precast Sites ➔ Consolidating North Island pipe manufacturing ➔ Expanding operational footprint in Papakura ➔ Upg
Slide 53: Building Products
Economic Building Products Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Steel well-positioned for ongoing share gain services industry top quartile disruption ➔ Upgrade of PCC ovens commencing FY2
Slide 54: Building Products
Building Products Winstone Wallboards investment delivering capacity and innovation 54 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 55: Building Products
Building Products Closing summary ➔ Business strategies and cost bases reset ➔ Strong focus on modern, automated manufacturing plants to drive operational efficiency ➔ Good programme of NPD aimed at broadening our addressable market ➔ Opportunities to push into adjacent sectors to deliver medium-ter
Slide 56: Questions
Questions 56 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 57: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 58: Concrete
Concrete Leading NZ Concrete business based on strong brands, capabilities and footprint ➔ Covering full concrete value chain, only in-country manufacturer of cement ➔ Unique footprint and logistics network, technical capabilities and brands ➔ Well-positioned in the fastest growing NZ markets and se
Slide 59: Concrete
Concrete Unique footprint and capabilities to serve customer needs across New Zealand >4,000 38,000 customers 1,200 nautical miles people >100 225,000 points of sale truck loads >1,000 340,000 concrete mix ready-mix deliveries designs 59 Fletcher Building Limited Investor Day Presentation | © May 20
Slide 60: Concrete market share
Concrete Well-positioned across concrete value chain and exposure to most attractive sectors Market Size ($b) and Share (%) HY21 Revenue Weighted Sector Exposure $1.0b $0.6b $0.4b $0.1b 100% 27% 52% Market share % 21% Key: Residential Non Residential Infrastructure / Other Certified Concrete Aggrega
Slide 61: Concrete
Concrete Solid improvement of profits and returns since FY19 EBIT ($m)1 EBIT Margin1 (%) and ROFE2 (%) Key Non-financial Measures c.18.4% FY19 YTD21 TRIFR3 2.0 2.9 $110-115m 14.0% c.13.5% NPS 51 64 $89m 11.1% Engagement 75% 72% Carbon (‘000t)4 686 512 FY19 FY21F FY19 FY21F EBIT margin ROFE 1. Before
Slide 62: Concrete
Concrete Market leading customer Lowest Economic performance of each Leadership in innovation, sustainability, Initiatives in place to drive both margin expansion (1-2%) solutions and services delivered cost business in industry top and growth via disruption and above market growth in the short- and
Slide 63: Concrete
Concrete Leadership in innovation, sustainability, and growth via Innovation as key driver for growth disruption From innovative products… … to integrated solutions +$2m sales +$4m sales >25% growth >30% growth from masonry products retaining wall systems +$2m sales +2m sales >30% growth >25% growth
Slide 64: Concrete
Concrete Market leading customer solutions and Digital as key driver for growth services From digital operation & supply chain… … to digital customer experience 40% digital 1st in NZ certified delivery digital RMX B2C sales process channel -$1m cost >50% digital cement supply chain by digital quarry
Slide 65: Concrete
Concrete Leadership in innovation, sustainability, and growth via Sustainability as key driver for growth disruption From leading CO2 footprint… … to circular solutions 35% >$3m contribution substitution from alternative fuels and raw materials in 2021 of coal with alternative fuels >25,000t of supp
Slide 66: Concrete
Concrete Closing summary – NZ Concrete provides strong platform for sustainable growth NZ leading concrete business based on strong brands, capabilities and footprint ➔ FY21-23: Performance improvement driven by top line and cost initiatives ➔ FY23+: Significant Growth opportunities related to: ➔ In
Slide 67: Questions
Questions 67 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 68: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 69: Distribution
Distribution Leading trade distribution businesses in New Zealand ➔ Leading trade distributor across the NZ market in building and plumbing supplies with strong geographic network reach ➔ Positioned for growth across the key metro markets, with a strong regional play to diversify sales and earnings
Slide 70: Distribution
Distribution Strong presence across New Zealand 140 points of presence from Kaitaia to Invercargill 4m+ 2,500 people customer visits a year 70k+ 250,000 trade customers customer deliveries 70 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 71: Distribution market share
Distribution Well-positioned in trade market mainly exposed to residential sector Market Size ($b) and Share (%) HY21 Revenue Weighted Sector Exposure $3b $0.8b $0.4b $0.3b $0.5b $3b 100% 19% Market share 81% Key: Residential Non Residential Small to Medium Sized Enterprises Comm. Plum Bath. GHBs Re
Slide 72: Distribution
Distribution Sustainable performance improvement through efficiency savings EBIT ($m)1 EBIT Margin1 (%) and ROFE2 (%) Key Non-financial Measures c.52.7% FY19 YTD21 46.0% $125-130m TRIFR3 5.8 5.8 NPS 36 38 $115m c.7.4% Engagement 75% 68% 7.2% Carbon (‘000t)4 8 7 FY19 FY21F FY19 FY21F EBIT margin ROFE
Slide 73: Distribution
Economic Distribution Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Near-term operational focus on continued profitable growth services industry top quartile disruption ➔ Strong foundations in plac
Slide 74: Distribution
Economic Distribution Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Key strategic priorities to drive market share gain and earnings growth services industry top quartile disruption Market leading
Slide 75: Distribution
Distribution Market leading customer solutions and E-Commerce with seamless integration into customer ecosystem services What have we done to improve performance? What we are doing to drive growth ➔ Constantly improving customer experience through enhanced functionality, such as “Skip the Counter” ➔
Slide 76: Distribution
Distribution Lowest delivered cost Network optimisation for customer centricity and efficiency What have we done to improve performance? What we are doing to drive growth ➔ Simplified and aligned regional leadership to drive consistency of execution ➔ Products delivered from nearest branch or DC, cl
Slide 77: Distribution
Distribution Leadership in innovation, sustainability, and growth via Digitised end-to-end supply chain disruption What have we done to improve performance? What we are doing to drive growth ➔ Digitising branch processes to capture customer order information, reduce errors and create a frictionless
Slide 78: Distribution
Distribution Closing summary – driving transformation through digital capability and delivery ➔ Strong financial performance with growing EBIT margins and strong return on funds employed (ROFE) ➔ Ongoing innovation in customer-focused digital solutions to drive a seamless integrated supply chain to
Slide 79: Questions
Questions 79 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 80: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 81: Residential and Development
Residential and Development NZ’s leading Residential and Industrial Development business ➔ Centred around Auckland and Christchurch, delivering new master-planned communities at scale. Extensive land portfolio sourced through direct acquisition, partnerships with government and iwi, and through othe
Slide 82: Residential and Development
Residential and Development Performance improvement driven by measured growth EBIT ($m)1 EBIT Margin1 (%) and ROFE2 (%) Key Non-financial Measures FY19 YTD21 c.26.4% TRIFR3 6.0 5.6 21.0% NPS 63 68 $145-150m $137m Engagement 85% 80% Carbon (‘000t)4 0.4 0.3 21.4% c.19.9% FY19 FY21F Zoned lots 5,422 4,
Slide 83: Residential
Economic Residential Leadership in Market leading performance innovation, customer of each sustainability, solutions and business in and growth via Growing to 1,000 homes p.a. in Auckland and Christchurch services industry top quartile disruption Sections Available1 ➔ Scaling the delivery of homes f
Slide 84: Offsite Manufacturing
Offsite Manufacturing Leadership in Market leading innovation, customer sustainability, solutions and and growth via Speed and volume deliver benefits services disruption ➔ Over 25% of our homes now suitable for panelisation through the DfMA1 process ➔ Delivered over 100 homes so far, with pipeline
Slide 85: Apartments
Economic Apartments Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Plan to scale up to c.300 units p.a. by FY24 services industry top quartile disruption Apartment Locations (FY22-24) ➔ In response
Slide 86: Retirement
Retirement Leadership in Market leading innovation, customer sustainability, solutions and and growth via Adding to our communities services disruption ➔ Our current communities cater to homeowners, from their first home to Integrated into Fletcher Living communities their last, but there are furthe
Slide 87: Industrial Development
Economic Industrial Development performance of each business in Supplementing Fletcher Building properties industry top quartile ➔ Our Development Team has proven skills and well-developed track record from working on the FBU portfolio. This has included sales at Rocla Gailes and CCT Penrith this ye
Slide 88: Residential and Development
Residential and Development Closing summary – Strong delivery of performance so far, future focused to grow Residential Units Taken To Profit ➔ A significant base of Residential earnings which are growing 1,200 and will be supplemented with: ➔ Growing Apartments business based on scaling to c.300 1,
Slide 89: Questions
Questions 89 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 90: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 91: Construction
Construction Leading New Zealand Tier 1 Contractor ➔ Vertical and horizontal construction offering in New Zealand and South Pacific, with strong heritage brands ➔ Full lifecycle service offering ➔ Specialised self-perform businesses Brands Business Units • Buildings: Major buildings for Government,
Slide 92: Construction
Construction The Construction sector matters to New Zealand Construction Market Size (Work Put In Place FY21) South Pacific Sector Size Fletcher Share Commercial $8.5b c.2% Infrastructure $8.9b c.13% Revenue Split South Pacific $2.3b c.4% South Pacific $19.7b1 c.7% 8% New Zealand 92% 92 Fletcher Bui
Slide 93: Construction
Construction Positioned in growth sectors TRANSPORT BUILDINGS THREE WATERS SECTOR SIZE / P.A. SECTOR SIZE / P.A. SECTOR SIZE / P.A. $7-7.5b $8-8.5b $1.5-2.0b ➔ Highway and local road construction ➔ Health – hospital upgrades ➔ Water & wastewater network upgrades ➔ Road maintenance ➔ Defence ➔ Treatm
Slide 94: Construction
Construction Current earnings reflective of nil margin legacy work EBIT ($m)1 EBIT Margin1 (%) Key Non-financial Measures FY19 YTD21 TRIFR2 6.1 4.9 $51m NPS3 34 n/a Engagement 72% 66% Carbon (‘000t)4 42 33 $25-30m 3.0% c.2.2% FY19 FY21F FY19 FY21F 1. Before significant items; FY19 is adjusted for pr
Slide 95: Construction
Construction Order book growth rebalanced to lower risk $3.3b Order Book ➔ 67% of our order book comprises medium risk style contracts – $0.5b Preferred status including multi-year alliance contracts, programme agreements and - asset maintenance $0.7b ➔ Underpins 75% of forecast revenue for FY22 and
Slide 96: Construction
Construction Growth driven by lower risk contracts FY21F Annual Revenue Sector Exposure Major Projects >$100m • Commercial Buildings • Roads • Water 23% Private $0.5b $0.9b 77% Infrastructure Services Local and Central Government • Brian Perry Civil • Higgins • South Pacific 96 Fletcher Building Lim
Slide 97: Construction
Construction Our 3-stage roadmap to create value STRENGTHEN DELIVERY BUILD CAPABILITY AROUND GROW ASSET LIFECYCLE CAPABILITY AND CAPACITY GROWTH CUSTOMERS PRODUCTS + SERVICES • Risk management platform and field tools • Specialised plant and assets • Upskilling people Diversifying revenue, offering
Slide 98: Construction
Construction Strengthen delivery capability and capacity Specialised Plant People Development Digital Platforms ➔ Asphalt ➔ Critical skills ➔ Marine ➔ Apprentices ➔ Trenchless pipelines ➔ Diversity ➔ Training & Development 98 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 99: Construction
Construction Build capability around growth customers Watercare Enterprise Model AMETI Kings Road 10-year programme Eastern Busway 2, 3, 4 Fiji Roads Authority ENTERPRISE FLETCHER ALLIANCE FLETCHER CONSTRUCT ONLY MODEL SHARE PROJECT SHARE (VARIOUS PROJECTS) $2.4b $1.2b $500m * Preferred $240m $80m 9
Slide 100: Construction
Construction Grow asset lifecycle products and services Asset Management Bituminous Products 100 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 101: Construction
Construction Closing summary ➔ Reshaped forward order book with growth rebalanced to lower risk ➔ Legacy run-off will largely be completed by the end of FY23 ➔ Strong secured revenue for FY22 ➔ Investing in specialised assets, digital risk management tools, safety leadership and people development p
Slide 102: Questions
Questions 102 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 103: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 104: Australia
Australia We have well-established and leading brands that operate across manufacturing and distribution sectors ➔ Businesses of scale in specific sectors ➔ Positioned for growth across the key markets Civil / Business Unit Overview Residential Commercial Infrastructure • Laminex is the leading manu
Slide 105: Australia
Australia Overall market outlook is expected to be stable over the next two years; strong growth in medium-term AU Historical and Forecast Market Outlook Residential/ A&A (A$b) The Australian market has rebounded well from the impact of COVID-19 CAGR -1% ➔ Residential (60% exposure) ➔ Residential de
Slide 106: Australia market share
Australia Despite a broadly flat market, good progress made on profitable share gains Market Size (NZ$b) and Share (%) HY21 Revenue Weighted Sector Exposure $1.8b $4.2b $1.4b $0.4b $0.5b $2.6b 12% 28% Market share % 60% Key: Residential Non Residential Infrastructure Our growth strategy has seen us
Slide 107: Australia
Australia The Division has evidenced material profit improvement in FY21; this will continue into FY22 and beyond as we target 5-7% EBIT margin by FY23 EBIT ($m)1 EBIT Margin1 (%) and ROFE2 (%) Key Non-financial Measures FY19 YTD21 c.7.6% TRIFR3 5.4 5.8 $100-105m NPS 33 25 Engagement 64% 59% 5.0% $7
Slide 108: Australia
Economic Leadership in Australia Market leading customer solutions and Lowest delivered cost performance of each business in innovation, sustainability, and growth via Quality of underlying earnings improved materially; now in growth mode services industry top quartile disruption 5-7% EBIT margin by
Slide 109: Laminex
Laminex Market leading customer Economic performance of each Leadership in innovation, sustainability, Performing very well in market; gross margin now at top quartile levels, solutions and services business in industry top and growth via disruption supported by sustainable low operating costs quart
Slide 110: Laminex
Laminex Leadership in innovation, sustainability, and growth via Now leading the market with best-in-class vitality and innovation disruption What have we done to improve performance? What we are doing to drive growth ➔ The strong digital offer is ➔ Primary demand via our sales team is driving speci
Slide 111: Laminex
Laminex Laminex will launch trial stores in June this year with a market leading B2B joinery offer YOU RESELL PRE-ASSEMBLED HIGH QUALITY, HAVEN Five store trial in Victoria 100% IN STOCK, KITCHENS BY RIGID CARCASS 100% OF TIME. FORMICA KITCHENS WITH PICK UP A TO THE END FREE AT HOME KITCHEN CONSUMER
Slide 112: Tradelink & Oliveri
Economic Tradelink & Oliveri Market leading customer solutions and Lowest delivered cost performance of each business in Making pleasing progress, supported by margin expansion & efficiency gains services industry top quartile ➔ 46% of total revenue is SME, up from 34% Customer Mix Targeted SME ➔ Gr
Slide 113: Tradelink & Oliveri
Tradelink & Oliveri Lowest Efficiencies evidenced through strong sales metrics, own brand sales exceeding expectations, delivered cost and digital offer launched with improving volumes and conversion rates What have we done to improve performance? What we are doing to drive growth Sales & Margin per
Slide 114: Fletcher Insulation
Fletcher Insulation Market leading customer Lowest Transformational change now complete; significant efficiency gains delivered; solutions and services delivered cost now executing growth strategy ➔ Direct to site model has facilitated a 35% reduction Glasswool GlasswoolManufacture manufacture cost
Slide 115: Iplex
Iplex Market leading customer Lowest Economic performance of each Leadership in innovation, sustainability, Pleasing progress in strategic areas of growth set against a slow project solutions and services delivered cost business in industry top and growth via disruption market; simplified business m
Slide 116: Stramit
Stramit Market leading customer Lowest Economic performance of each Leadership in innovation, sustainability, Material improvement in profitability YoY; performed well in its key solutions and services delivered cost business in industry top and growth via disruption strategic growth areas quartile
Slide 117: Australia
Economic Australia Leadership in Market leading performance innovation, customer Lowest of each sustainability, solutions and delivered cost business in and growth via Closing summary services industry top quartile disruption Strong Momentum in Growing share 30% Digitisation Commitment to operationa
Slide 118: Questions
Questions 118 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 119: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 120: Sustainability
Sustainability Fletcher Building Limited
Slide 121: Improving the world around us through smart thinking, simply delivered
Improving the world around us through smart thinking, simply delivered BE THE LEADER IN MAKING SUSTAINABLE BUILDING PRODUCTS CAREFUL MANAGEMENT OF OUR RESOURCES TRANSPARENT AND EMISSIONS ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING PARTNER WITH OUR SUPPLY CHAIN TO SUPPORT OUR DELIVER SUSTAINABLE P
Slide 122: We know where it comes from… it's a big opportunity
We know where it comes from… it’s a big opportunity Group Carbon Emissions GBC: ➔ Clinker 36% ➔ Coal 21% GBC 57% Electricity Australia: ➔ Significant contributor due to carbon intensity of grid, in particular coal in Victoria Electricity AU 22% Diesel: ➔ Mainly Higgins and Winstone Aggregates Diesel
Slide 123: … and we have a plan to take advantage of it…
… and we have a plan to take advantage of it… Our Carbon Reduction Roadmap: Highest Emitters 87% of Total Emissions 1,400,000 1,200,000 1,000,000 Emissions (tCO2e) 800,000 600,000 400,000 200,000 0 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 Golden Bay Cement Laminex AU Fletcher
Slide 124: … from high impact projects
… from high impact projects Key high impact initiatives to drive carbon reduction by FY30 GBC: -15% ➔ Alternative fuels and supplementary cementitious materials -28% -28% Electricity Australia: -9% GBC ➔ Green electricity and rooftop solar GBC Diesel: -3% ➔ Transition to Electric Vehicles (EV) Elect
Slide 125: … and we measure, disclose and verify our sustainability performance
… and we measure, disclose and verify our sustainability performance Workforce participation disclosed Major product lines now hold EPDs and gender parity review completed Listed in the Asia-Pacific index Most improved NZ company last year 125 Fletcher Building Limited Investor Day Presentation | ©
Slide 126: Innovation
Innovation Fletcher Building Limited
Slide 127: Innovation at Fletcher Building – three key pillars
Leadership in innovation, Innovation at Fletcher Building – three key pillars sustainability, and growth via disruption We bring the outside in Innovation is a process and discipline Creating an Explorers Mindset and partner with disruptors Innovation involves the whole organisation, from the bottom
Slide 128: Pillar 3: Ecosystem scans
Leadership in innovation, Pillar 3: Ecosystem scans We bring the outside in and partner with disruptors sustainability, and growth via disruption Clean Concrete Environmental Sustainability Modular / Offsite Construction Distribution Transport & Logistics 128 Fletcher Building Limited Investor Day P
Slide 129: We bring the outside in and partner with disruptors
Leadership in innovation, We bring the outside in and partner We bring the outside in and partner with disruptors sustainability, and growth via disruption 150+ executives and 700+ start-ups / Lasting Outcomes ➔ Emerging outside technology is senior leaders tech innovators being implemented today in
Slide 130: People
People Fletcher Building Limited
Slide 131: Our people are integral to delivery of our strategy
Our people are integral to delivery of our strategy Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Market leading customer Ze
Slide 132: Driven by our values
Driven by our values Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, Strategic Market leading customer Zero injuries every day Lowest de
Slide 133: Questions
Questions 133 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 134: Agenda
Agenda 1. Introduction, Fletcher Building Overview Ross Taylor 2. Group Financials Bevan McKenzie 3. Safety Wendi Croft 4. Building Products Hamish McBeath 5. Concrete Nick Traber 6. Distribution Bruce McEwen 7. Residential and Development Steve Evans 8. Construction Peter Reidy 9. Australia Dean Fr
Slide 135: Our strategy positions us well to drive shareholder value
Our strategy positions us well to drive shareholder value in the short- and long-term Vision To be the leader in New Zealand and Australian building products and solutions Purpose Improving the world around us through smart thinking, simply delivered Economic performance Leadership in innovation, St
Slide 136: Delivering performance & growth against robust NZ+AU macro backdrop
Delivering performance & growth against robust NZ+AU macro backdrop Driving growth through operational improvement and growth initiatives; well-positioned through to FY23+ FY21 FY22-23 FY23+ Strong performance improvements Driving growth through operational Well-positioned through to FY23 and achiev
Slide 137: Questions
Questions 137 Fletcher Building Limited Investor Day Presentation | © May 2021
Slide 138: Important Information
Important Information This presentation has been prepared by Fletcher Building Limited and its group of companies (“Fletcher Building”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it. In certain sections of this pre