Slide 1: Investor Presentation
INVESTOR PRESENTATION For personal use only May 2012 Victoria Park Tunnel, Auckland
Slide 2: Disclaimer
Investor Presentation | Fletcher Building | © May 2012 | Page 2 Disclaimer For personal use only 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 ar
Slide 3: Company & Market Overview
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 3 Investor Presentation COMPANY & MARKET For personal use only OVERVIEW Christchurch, August 2011
Slide 4: Fletcher Building at a glance
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 4 Fletcher Building at a glance For personal use only • Revenue – 6 months to 31 December: NZ$4.5 billion • Market Capitalisation: NZ$4.3 billion • Employees: 20,000 • Shareholders: (as at 31 December 2011) Reven
Slide 5: Fletcher Building – key listing information
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 5 Fletcher Building – key listing information For personal use only • Listed on the New Zealand and Australian stock exchanges New Zealand • Second largest listed company by market capitalisation on the NZX Austr
Slide 6: Market leading businesses
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 6 Market leading businesses For personal use only Building Laminates Concrete Construction Crane Distribution Steel Products & Panels Plasterboard Cement Construction Pipelines – Building The Laminex Coated Ste
Slide 7: Record lows for new residential consents in New Zealand and Australia
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 7 Record lows for new residential consents in New Zealand, and significant residential slowdown in Australia For personal use only Dec 2011 Dec 2010 Dec 2009 11/10 Building Consents 12 months 12 months 12 months
Slide 8: New Zealand construction activity levels 2005-2011
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 8 New Zealand construction activity levels 2005-2011 For personal use only Total Residential Consents Total Construction NZ – NZ$m Years to December Years to December 26,023 25,952 25,590 5,230 5,982 4,595 4,141
Slide 9: Australian construction activity levels 2005-2011
Investor Presentation | Fletcher Building | © May 2012 Company & Market Overview | Page 9 Australian construction activity levels 2005-2011 For personal use only Residential Consents Australia Years to December 176,564 157,505 159,590 153,949 148,155 146,492 149,076 2005 2006 2007 2008 2009 2010 201
Slide 10: Strategy
Investor Presentation | Fletcher Building | © May 2012 Strategy | Page 10 Investor Presentation STRATEGY For personal use only Formica for Tinderbox, UK
Slide 11: Strategy
Investor Presentation | Fletcher Building | © May 2012 Strategy | Page 11 Strategy For personal use only Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating model Ta
Slide 12: Fletcher Building has a vertically integrated value chain
Investor Presentation | Fletcher Building | © May 2012 Strategy | Page 12 Fletcher Building has a vertically integrated value chain For personal use only Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Distribu
Slide 13: Half Year 2012 Financial Results
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 13 Investor Presentation HALF YEAR 2012 For personal use only FINANCIAL RESULTS The Cloud, Auckland waterfront
Slide 14: Weak residential markets impacted earnings
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 14 Weak residential construction markets in New Zealand and Australia impacted earnings For personal use only Dec 2011 Dec 2010 NZ$m 6 months 6 months % Change Sales 4,509 3,468 +30 EBIT 256 285 -10 EBITDA
Slide 15: Weaker market conditions impacted all divisions
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 15 Weaker market conditions impacted all divisions For personal use only EBIT before unusuals NZ$million1 80 63 60 56 57 53 43 43 33 25 25 24 15 0 Building Products Crane Distribution Concrete Construction
Slide 16: Cashflow from operations impacted by working capital movements
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 16 Cashflow from operations impacted by working capital movements, higher funding costs and cash tax payments For personal use only Dec 2011 Dec 2010 6 months 6 months % Change EBITDA 372 381 -2 Funding co
Slide 17: Key ratios
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 17 Key ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 42 40 24 35 34 14 14 31 27 22 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Dec-11 -26 Jun-07 Jun-08 Jun-
Slide 18: Full year forecast capital expenditure includes $100m in acquisitions
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 18 Full year forecast capital expenditure includes $100m in acquisitions For personal use only 397 * Acquisitions Dec 11 Dec 10 FY12 Growth 6 mths 6 mths %∆ Forecast 100 Stay in business 307 ¹ 289 Stay-in-
Slide 19: Debt maturity profile
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 19 Debt maturity profile For personal use only Funding and Maturity Profile US$300m private placement to US February 2012 investors completed post 31 December 2011. 200 Key credit statistics following US p
Slide 20: Canterbury update
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 20 Canterbury update For personal use only Estimates of earthquake damage (October 2011) Repair Timeframes Sector NZ$B Sector Years Residential 13.0 Residential – new build 5 Commercial 4.0 Residential – r
Slide 21: Canterbury update
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 21 Canterbury update For personal use only Residential: • 11,000 new homes to be built including 7,000 “Red Zone” properties • 16,500 re-instatements Commercial: • 900 demolitions completed, with a further
Slide 22: Christchurch before the earthquakes
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 22 Christchurch before the earthquakes For personal use only
Slide 23: Christchurch City October 2011
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 23 Christchurch City October 2011 For personal use only
Slide 24: New Zealand commercial and infrastructure construction outlook
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 24 New Zealand commercial and infrastructure construction outlook For personal use only Construction backlog of $1.3 billion • Waterview motorway/tunnel project $398m: construction activity to get underway
Slide 25: Strategic issues
Investor Presentation | Fletcher Building | © May 2012 Half Year 2012 Financial Results | Page 25 Strategic issues For personal use only Laminex − Fall in domestic demand and high currency have impacted earnings performance in Australia and NZ. − $21m in pre-tax unusuals restructuring costs incurred
Slide 26: Outlook
Investor Presentation | Fletcher Building | © May 2012 Outlook | Page 26 Half Year Results OUTLOOK For personal use only
Slide 27: Outlook FY2012
Investor Presentation | Fletcher Building | © May 2012 Outlook | Page 27 Outlook FY2012 For personal use only New Zealand − Conditions expected to remain challenging − Modest uplift in housing consents in first half should lift activity in second half, but from low base − Infrastructure spending low
Slide 28: Financial outlook FY2012
Investor Presentation | Fletcher Building | © May 2012 Outlook | Page 28 Financial outlook FY2012 For personal use only Based on: Current assessment of market conditions Unaudited half year results Net earnings before unusuals for the 2012 financial year are expected to be in the range of $310 milli
Slide 29: Appendix
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 29 Investor Presentation APPENDIX For personal use only Crane Copper Tube, Adelaide
Slide 30: Building Products
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 30 Building Products For personal use only Division Overview Business Description The Building Products division manufactures a broad Fletcher Insulation in Australia manufactures a range of building products. The divisions’ core
Slide 31: Building Products result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 31 Building Products result For personal use only Dec 11 Dec 10 NZ$m 6 mths 6 mths %∆ Plasterboard earnings lower due to weaker NZ residential market, but Sales 355 371 -4 market share maintained. EBITDA 56 69 -19 Insulation earn
Slide 32: Concrete
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 32 Concrete For personal use only Division Overview Business Description The Concrete division consists of a vertically integrated Firth New Zealand’s leading national concrete company with concrete business in New Zealand and co
Slide 33: Concrete result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 33 Concrete result For personal use only Dec 11 Dec 10 NZ Concrete NZ$m 6 mths 6 mths %∆ • Softer demand for aggregates Sales 468 442 +6 and masonry products. • Readymix concrete and EBITDA 91 87 +5 concrete pipe product volumes
Slide 34: Construction
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 34 Construction For personal use only Division Overview Business Description The Construction division comprises one of New A leading general constructor of commercial, retail, Zealand’s largest general construction contractors B
Slide 35: Construction result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 35 Construction result For personal use only Dec 11 Dec 10 Several large projects completed NZ$m 6 mths 6 mths %∆ during the period. Sales 520 592 -12 Tighter project margins due to EBITDA 30 38 -21 subdued market. Total EBIT 25
Slide 36: Crane
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 36 Crane For personal use only Division Overview Business Description Crane is the Australian leader in the manufacturing and A leading manufacturer and supplier of plastic distribution of plastic pipelines systems, plumbing and
Slide 37: Crane result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 37 Crane result For personal use only Dec 11 Dec 11 Dec 10¹ Increased pipeline sales to gas and NZ$m 6 mths 6 mths 6 mths %∆ mining offset weaker residential EBIT Revenue demand. Pipelines 28 395 342 +15 Distribution Distribution
Slide 38: Distribution
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 38 Distribution For personal use only Division Overview Business Description The Distribution division consists of the PlaceMakers Is a nationwide supplier of building materials to business in New Zealand and supplies building ma
Slide 39: Distribution result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 39 Distribution result For personal use only Dec 11 Dec 10 Sales decline of 10% due to NZ$m 6 mths 6 mths %∆ subdued activity levels and continued disruption to Sales 402 446 -10 Christchurch stores – consistent EBITDA 19 29 -34
Slide 40: Laminates & Panels
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 40 Laminates & Panels For personal use only Division Overview Business Description The Laminates & Panels division comprises of the Is the leading Australian and New Zealand Australasian based woodpanels manufacturer and manufact
Slide 41: Laminates & Panels result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 41 Laminates & Panels result For personal use only Dec 11 Dec 10 Laminex NZ$m 6 mths 6 mths %∆ • Australian volumes of higher margin decorated board down due to fall in Sales 939 1,001 -6 new housing starts and additions and EBIT
Slide 42: Formica: continued improvement in earnings
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 42 Formica: continued improvement in earnings due to volume growth in Asia and cost reduction measures For personal use only EBIT NZ$m 1H12 1H11 % Change Asia 18 19 -5 North America 12 11 +9 Europe 2 1 +100 Corporate (6) (8) -25
Slide 43: Steel
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 43 Steel For personal use only Division Overview Business Description The Steel division operates a diversified portfolio of • Stramit Building Products: a leading Australian steel businesses across three business lines, primaril
Slide 44: Steel result
Investor Presentation | Fletcher Building | © May 2012 Appendix | Page 44 Steel result For personal use only Dec 11 Dec 10 Long steel earnings impacted by NZ$m 6 Mths 6 Mths %∆ reduced margins, as a result of global pricing pressures, Sales 596 616 -3 particularly in Australia. EBITDA 36 54 -33 Roll