Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (March 2008)
24 slides from Fletcher Building's investor presentation, Mar 13, 2008
Slide 1: Analysts Presentation: March 2008
ANALYSTS PRESENTATION: MARCH 2008 For personal use only Interior of Christchurch Frame & Truss Manufacturing Plant 1 Opened January 2008
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT 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 are forward looking, Fletcher Building’s actual results
Slide 3: Strategic Intent
STRATEGIC INTENT For personal use only OUR BUSINESS FOCUS To be a customer centric business with an underlying commitment to operational excellence. 3
Slide 4: PlaceMakers Vision
PLACEMAKERS VISION For personal use only To be the supplier of choice for builders and DIY project customers To be No. 1 in the trade and DIY project markets. Create demand and facilitate exceptional supply of products and services to our target markets. 4
Slide 5: Market Leadership
MARKET LEADERSHIP For personal use only PlaceMakers Competitive Advantage 1. PlaceMaker’s brand power - Range of products/services - Know How Can Do - Geographic reach - Service trade and retail 2. Joint Venture Operator Model - Model attracts and incentivises the right people - Owner (JVO) to Owner
Slide 6: Typical Customers and Market Position
For personal use only TYPICAL CUSTOMERS PRODUCT GROUP DIY Small Trade Trade Large Subbie Builder Volume Frame & Truss Other structural timber Interior Panels / Plasterboard Doors / Windows ITM Ext. Cladding / Roofing Insulation MARKET POSITION Other Outdoor Timber CARTERS Concrete / Agg. / MEGA Maso
Slide 7: Market Position
MARKET POSITION For personal use only Historical earnings 62 outlets across New Zealand 100 10.0 90 80 EBITDA margin (%) 34% market share trade of core 70 EBITDA ($M) 60 building materials 50 5.0 40 30 No.1 in key building materials 20 10 - - 2003 2004 2005 2006 2007 2008 Trade focus – 80+%
Slide 8: Half Yearly Review
HALF YEARLY REVIEW For personal use only $m % 1H08 1H07 Sales × 9.1 565 518 EBIT × 7.7 42 39 Market Activity Margin % Ø 1.3 7.4 7.5 Competitive period for market Funds × 12.1 167 149 Market Share Return on Funds % Ø 3.8 50.3 52.3 Remained stable despite pressure Same store sales revenue Earnings
Slide 9: Growth Drivers
GROWTH DRIVERS For personal use only Joint Venture partner model Acquisition of independents New store locations Store upgrade / enhancement Product / Services extensions e.g. Installed Solutions 9
Slide 10: Key Indicators of Business Improvement
KEY INDICATORS OF BUSINESS IMPROVEMENT For personal use only Customer growth Transaction value Terms of trade Labour productivity Working capital 10
Slide 11: Targeted Customer Growth
TARGETED CUSTOMER GROWTH For personal use only STRONG GROWTH IN VOLUME BUILDERS SALES and MARGIN Jan - Dec 05 Jan - Dec 06 Jan - Dec 07 Sales 11
Slide 12: Transaction Value Increasing
TRANSACTION VALUE INCREASING For personal use only Dec 07 up 9% on Dec 06 200.0 190.0 180.0 170.0 $ per transaction 160.0 150.0 140.0 130.0 120.0 110.0 100.0 Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- 06 06 06 07 07 07 07 07 07 07 07 07 07 07 07 12
Slide 13: Terms of Trade
TERMS OF TRADE For personal use only REBATES GROWING FASTER THAN PURCHASES Rebate % 06 Rebate % 07 July August September October November December 13
Slide 14: Labour Productivity
LABOUR PRODUCTIVITY For personal use only MONTHLY SALES PER FTE IS IMPROVING Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 14
Slide 15: Working Capital Turn to Sales
WORKING CAPITAL TURN TO SALES For personal use only GM Stockturn up 15% Dec 06 – Dec 07 13.0 12.5 12.0 11.5 Working Capital Turn 11.0 10.5 10.0 9.5 9.0 8.5 8.0 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 15
Slide 16: Network Development Completed
NETWORK DEVELOPMENT COMPLETED For personal use only Three branches relocated to new sites:- Whitianga Feb 07 Palmerston North Mar 07 Thames Dec 07 Two Manufacturing facilities developed:- Christchurch Jan 08 Timaru Feb 08 Total investment of $7m. 16
Slide 17: Network Development Approved
NETWORK DEVELOPMENT APPROVED For personal use only Two branches in development:- Warkworth New Plymouth Two Manufacturing in re-development:- New Plymouth Hawkes Bay 17
Slide 18: Examples of Developments
EXAMPLES OF DEVELOPMENTS For personal use only Christchurch Frame and Truss is complete with the latest technology The Thames unit is appropriately sized and trade focused 18
Slide 19: Acquisitions
ACQUISITIONS For personal use only Two successful acquisitions will deliver $10m of revenue. Cromwell ITM Strattford Hammer Hardware Three investigations concluded and declined due to:- Price to value equation Operational fit 19
Slide 20: Key Strategic Objectives
KEY STRATEGIC OBJECTIVES For personal use only To grow the business by increasing revenue, lowering costs, protecting margins, improving safety and developing people. Grow sales revenue and EBIT by 10% per annum. Defend and grow the FDL network. Use the new ERP system as a catalyst for busines
Slide 21: Key Strategic Initiatives
KEY STRATEGIC INITIATIVES For personal use only Improve gross margins via a competitive pricing policy to address competition prices and customers' price perceptions. Improve net margins via disciplined/consistent customer discount policies rewarding size/strategic importance. Network/facility
Slide 22: Key Strategic Initiatives
KEY STRATEGIC INITIATIVES For personal use only Terms of Trade - institutionalise processes to capture optimal negotiated returns based on scale and purchasing power. Total Customer Management - retain existing customers, target share of wallet gains and increase average retail transactional val
Slide 23: Challenge Remains
CHALLENGE REMAINS For personal use only Residential consents expected to decline. Other economic indicators are variable, however PlaceMakers has:- Regional strength and ability to pick up on niche markets e.g. dairy and farm sheds Business owner to Business owner relationship 23
Slide 24: Out Performing Market Trends
For personal use only 0 100 200 300 400 500 600 700 J u l- 0 0 S ep-00 N ov -00 J an-01 M ar-01 M ay -01 J u l- 0 1 S ep-01 N ov -01 J an-02 M ar-02 M ay -02 J u l- 0 2 S ep-02 N ov -02 J an-03 M ar-03 3 per. Mov. Avg. (Dw ell New ) M ay -03 3 per. Mov. Avg. (Total PM Sales $) J u l- 0 3 S ep-03 N o
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