Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (March 2011)
44 slides from Fletcher Building's investor presentation, Mar 2, 2011
Slide 1: Investor Presentation March 2011
1 For personal use only Investor Presentation March 2011 Jonathan Ling Chief Executive Officer Investor Presentation| Fletcher Building | © March 2011
Slide 2: Disclaimer
2 For personal use only 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 company operates. Because these statements are forward looking, Fletcher Building Building’ss actual result
Slide 3: Agenda
3 For personal use only Agenda • Company and Market Overview • Strategy • Financial Results • Update on Key Developments • Divisional Performance • Outlook Investor Presentation| Fletcher Building | © March 2011
Slide 4: Company and Market Overview
4 For personal use only Company and Market Overview Investor Presentation| Fletcher Building | © March 2011
Slide 5: Fletcher Building at a glance
5 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Fletcher Building at a glance For personal use only • Revenue - year to 30 June 2010: NZ$6,799 million • Market Capitalisation NZ$5.22 billion Ranked # 1 on NZX # 62 on ASX • Employees: 1
Slide 6: Market leading businesses
6 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Market leading businesses For personal use only Building Distribution Infrastructure Laminates Steel Products & Panels Steel Plasterboard Building Materials Construction The Laminex Group Coated Steel Insul
Slide 7: Geographic exposure to end markets
7 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Geographic exposure to end markets Summary Residential Commercial Infrastructure Total 51% 25% 24% 100% New Zealand 57% 30% 13% 100% Australia 49% 51% 0 100% Rest of
Slide 8: Strategy
8 For personal use only Strategy Investor Presentation| Fletcher Building | © March 2011
Slide 9: Strategy
9 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Strategy Longer term strategy continues to be: • improve earnings reliability • maintain and improve internal capabilities - increased i d focus f on growth h orient
Slide 10: Fletcher Building has a vertically integrated value chain
10 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Fletcher Building has a vertically integrated value chain For personal use only Laminates Building Other Steel Concrete Manufacturers & Panels Products Dedicated Shared Other Construction Distribution Dist
Slide 11: NZ's economic fundamentals are sound
11 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only NZ’s economic fundamentals are sound • Key drivers of the economy remain robust – agriculture and tourism • Government stimulus measures have been modest – longer t
Slide 12: Residential recovery has stalled, while commercial markets have bottomed out
12 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Residential recovery has stalled, while commercial markets have bottomed out Dec 2010 Dec 2009 Dec 2008 10/09 Building Consents 12 months 12 months 12 months %Mvmt
Slide 13: Financial Results
13 For personal use only Financial Results Investor Presentation| Fletcher Building | © March 2011
Slide 14: Earnings growth driven by modest revenue growth and margin expansion
14 Company & Market Overview | Strategy | Financial Results | Key Developments| Divisional Performance | Outlook For personal use only Earnings growth driven by modest revenue growth and margin expansion Dec 2010 Dec 2009 NZ$m 6 months 6 months % Change Sales 3,468 3,393 +2 EBITDA 381 372 +2 EBIT 28
Slide 15: Earnings ahead in all divisions except Building Products
15 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Earnings ahead in all divisions except Building Products EBIT NZ$million1 1. Earnings before interest and tax Investor Presentation| Fletcher Building | © March 201
Slide 16: Net debt levels increased with investment in Crane Group
16 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Net debt levels increased with investment in Crane Group 1800 1500 92 9 1 141 150 1200 78 (32) 900 (7) 600 1,259 1,107 (280) 300 0 up Shares Dividends Working capit
Slide 17: Key Ratios
17 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Key Ratios Total T t l Sh Shareholder h ld R Return t (TSR) D bt/D bt Plus Debt/Debt Pl Equity E it Percentage Percentage Jun-06 Jun-07 Jun-09 Jun-10 Dec-10 Return on Average Equity R
Slide 18: Capital expenditure – focus shifting to growth-orientated initiatives
18 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Capital expenditure – focus shifting to growth‐orientated initiatives Capital Expenditure versus • Stay-in-business capex approx Depreciation NZ$M 350 60% of deprec
Slide 19: Update on Key Developments
19 For personal use only Update on Key Developments Investor Presentation| Fletcher Building | © March 2011
Slide 20: Overview of Crane's businesses
20 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Overview of Crane’s businesses For personal use only Crane Division (FY10 in A$m, to nearest million) Aust. NZ Revenue EBIT1 Key Brands Pi li Pipelines Manufacturer and distributor of pi
Slide 21: Divisional structure of the Combined Group
21 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Divisional structure of the Combined Group For personal use only Crane will form a new division within the Combined Group, with its complementary businesses representing strategic extens
Slide 22: Summary of the Revised Offer for Crane Group Limited
22 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Summary of the Revised Offer for Crane Group Limited For personal use only • Revised Offer comprising A$3.50 cash and one Fletcher Building share for each Crane ordinary share • Crane’s
Slide 23: Summary of transaction metrics
23 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Summary of transaction metrics For personal use only • Total implied value to be received by Crane Metrics A$ shareholders of A$10.071 represents an Total Implied Value per share $10.07
Slide 24: Acquisition of Crane Group Ltd is financially attractive to Fletcher Building
24 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Acquisition of Crane Group Ltd is financially attractive to Fletcher For personal use only Building • Crane’s 1H11 result demonstrated solid performance for the 6 months ended 31 Decembe
Slide 25: Canterbury earthquake update
25 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Canterbury earthquake update For personal use only • Following g first significant g earthquake q on 4 September p 2010: • Fletcher Construction was selected to undertake project managem
Slide 26: Watertightness – fixing leaky homes
26 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Watertightness – fixing “leaky homes” For personal use only • PWC report p to g government of March 2010 estimated 22,000 , to 89,000 dwellings affected • Consensus forecast is 42,000 dw
Slide 27: NZ Infrastructure Outlook
27 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook NZ Infrastructure Outlook For personal use only National Infrastructure Plan: CY10 to CY16 NZ$M Source: National Infrastructure Plan March 2010 Investor Presentation| Fletcher Building |
Slide 28: Fletcher Building Tax Crediting Policy on Dividends
28 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook Fletcher Building Tax Crediting Policy on Dividends For personal use only • Fletcher Building announced on 9 February 2011 a new tax crediting policy for its dividends whereby: − all int
Slide 29: Divisional Performance
29 For personal use only Divisional Performance Investor Presentation| Fletcher Building | © March 2011
Slide 30: Building Products
30 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Building Products Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation|Tasm
Slide 31: Building Products result
31 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Building Products result Dec 10 Dec 09 • Insulation earnings down NZ$m 6 Mths 6 mths %∆ 51% due to impact of stimulus Sales 371 37 436 43 -15 5 package withdrawal i
Slide 32: Distribution
32 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Distribution Pl PlaceMakers M k The premier suppliers of building materials to New Zealand’s commercial and residential construction markets • 62 outlets across New
Slide 33: Distribution result
33 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Distribution result Dec 10 Dec 09 • Sales ahead due to prior year NZ$m 6 Mths 6 mths %∆ improvement in new housing Sales l 446 435 +3 construction activity EBITDA 2
Slide 34: Infrastructure
34 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Infrastructure Concrete New Zealand Firth|Humes Pipeline Systems|Golden Bay Cement|Winstone Aggregates • 15% of NZ aggregates markets • 55% of NZ cement market • 34
Slide 35: Infrastructure result
35 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Infrastructure result NZ Concrete • Cement volumes steady Dec 10 Dec 09 • Softer demand for readymix and NZ$m 6 mths 6 mths %∆ masonry products Sales 1,034 974 +6 •
Slide 36: Laminates & Panels
36 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Laminates & Panels Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market shares – Decorated board – No.1 – Medium d d densi
Slide 37: Laminates & Panels result
37 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Laminates & Panels result Laminex Dec 10 Dec 09 • Australian volumes higher on NZ$m 6 mths 6 mths %∆ new house completions and Sales 1,001 965 +4 government-funded
Slide 38: Formica: continued improvement in earnings, due to Asia growth and cost reduction
38 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Formica: continued improvement in earnings, due to Asia growth and cost reduction programme EBIT US$m 1H11 1H10 Asia 14 12 North America 8 3 E Europe 1 -3 3 Corpora
Slide 39: Steel
39 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Steel Rollforming g and Coated Steel Pacific CoilCoaters|Stramit Building Products|Dimond • Approx. 24% of Australian market (Stramit) • Major player in New Zealand
Slide 40: Steel result
40 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Steel result Dec 10 Dec 09 NZ$m 6 Mths 6 mths %∆ • Long steel earnings impacted Sales 616 583 5 3 +6 by competitive pricing pressures and higher scrap EBITDA 54 54
Slide 41: Outlook
41 For personal use only Outlook Investor Presentation| Fletcher Building | © March 2011
Slide 42: Outlook 2011
42 Company & Market Overview | Strategy | Financial Results | Key Developments | Divisional Performance | Outlook For personal use only Outlook 2011 Outlook for 2011 financial year continues to be mixed as to the pace of economic recovery, and impacts of Queensland floods and the Canterbury earthqua
Slide 43: Important notice
43 Important notice For personal use only NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE U.S. OR TO U.S. PERSONS This presentation does not constitute an offer of any securities for sale in the United States or in any other jurisdiction. The securities offered have n
Slide 44: Jonathan Ling, Chief Executive Officer
44 For personal use only Investor Presentation March 2011 Jonathan Ling Chief Executive Officer Investor Presentation| Fletcher Building | © March 2011
Fletcher Building — Investor Presentation (March 2011) on 6ix