Fletcher Building Limited · NZX:FBU
Fletcher Building — FY2022 Earnings Presentation
31 slides from Fletcher Building's earnings presentation, Aug 17, 2022
Slide 1: Full Year Results to 30 June 2022
Fletcher Building Full Year Results to 30 June 2022 17 August 2022 Fletcher Building Limited
Slide 2: 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. This presentation provides addi
Slide 3: Agenda
Agenda 1. Results Overview Ross Taylor 2. Financial Results Bevan McKenzie 3. Outlook Ross Taylor Fletcher Building Limited
Slide 4: FY22 strong performance delivered through successful strategy execution
FY22 strong performance delivered through successful strategy execution Improved financial, operating performance and balanced scorecard metrics across the Group FY22 performance and growth delivered as forecast: EBIT $756m, up 13% from FY21; strong 2HFY22 EBIT margin of 9.5% Net earnings attr
Slide 5: FY22 results at a glance
FY22 results at a glance Momentum in revenue, earnings and margins highlighting delivery of embedded operational improvements Revenue ($b) EBIT1 ($m) FY22 trading highlights 756 8.1 8.5 668 Revenue & EBIT up YoY despite large 1Q22 COVID impacts, almost all NZ businesses shut down for up to five we
Slide 6: FY22 results at a glance
FY22 results at a glance Residential stock & inventory rebuild; continued strong balance sheet driving ability to execute strategy Trading Cash Flow ($m)1 Leverage (Net Debt/EBITDA) FY22 trading highlights 752 Trading cash flows invested into pipeline of Residential housing and inventory rebuild f
Slide 7: FY22 results at a glance
FY22 results at a glance Sustainable shareholder returns delivered with final dividend of 22.0 cents per share declared Net Earnings ($m) EPS (cps) FY22 trading highlights 432 53.5 Strong Net Earnings improvement, up 42% 305 37.0 Significant Items lower YoY, charges of $54m mainly relating to cu
Slide 8: Balanced Scorecard
Balanced Scorecard Good progress continues on driving safety culture and lowering our carbon emissions Safety: good progress continues Total Recordable Injury Frequency Rate 1 32% reduction in TRIFR 5.0 75% reduction in serious injuries 3.4 90% Four businesses injury free (882) sites injury fr
Slide 9: Balanced Scorecard
Balanced Scorecard Verified science based targets, 12% lower carbon from FY18; driving customer focus through supply chain disruptions Sustainability: 30% lower carbon by 2030 Carbon (CO2) Emissions (‘000 Tonnes) and Carbon Emission Intensity 1 61% of product revenue from sustainably certified pro
Slide 10: Divisional performance summary
Divisional performance summary Strong second half contribution by all divisions following 1QFY22 disruptions; 2HFY22 momentum into FY23 Division Gross Revenue EBIT2 FY22 trading highlights Building Strong trading momentum in Building Products, Distribution and $1,610m $210m Concrete businesses; go
Slide 11: Agenda
Agenda 1. Results Overview Ross Taylor 2. Financial Results Bevan McKenzie 3. Outlook Ross Taylor Fletcher Building Limited
Slide 12: Income Statement
Income Statement Strong growth in earnings and dividend reflects continued performance improvement Jun 2021 Jun 2022 FY22 income statement 12 months 12 months NZ$m restated1 reported Var 1Q22 significantly impacted by COVID lockdowns, mainly in NZ, Revenue 8,120 8,498 5% c.$(100)m EBIT impact EBIT
Slide 13: Cash flow
Cash flow Cash flow reflects targeted working capital investment Jun 2021 Jun 2022 FY22 cash flows Cash flow 12 months 12 months NZ$m Restated1 Reported Good underlying trading cash-flows, strong customer cash EBIT before significant items 668 756 collections Depreciation and amortisation 354 350
Slide 14: Working Capital
Working Capital Targeted investment in inventories to support growth and customer service levels Cash flow working capital movements Jun 2021 Jun 2022 FY22 working capital NZ$m 12 months 12 months Residential & Development Residential and Development 105 (103) Investment in FY22 in land & housin
Slide 15: Capex
Capex Investment balanced between maintenance & efficiency capex, digital, sustainability and organic growth Capex Jun 2021 Jun 2022 Investment Focus NZ$m 12 months1 12 months Base capex envelope expected to average c.$200m-$250m p.a. Base capex 144 213 Above Base: growth capex - 35 Includes c.$
Slide 16: Net debt
Net debt Uplift in FY22 from targeted inventory investments, WWB capex and shareholder returns Net Debt: Jun 21 to Jun 22 (NZ$m) 292 5 851 250 397 670 19 43 103 239 173 Net Debt Inventory - Working Working Funding Net Share Dividend Other 1 Trading Net Debt Jun-21 Manufacturing Capital - Capital - C
Slide 17: Leverage
Leverage Balance sheet settings remain strong; expect to remain at lower end of 1x-2x leverage range Leverage (Net Debt / EBITDA) Leverage and Balance Sheet Uplift in leverage ratio to 0.6x reflects investments in working capital, WWB plant and share buyback 2.0x Strong balance sheet to support
Slide 18: Funding
Funding Long-dated debt maturity and strong liquidity of $1.1b Debt maturity profile ($m) Debt facilities and drawings ($m) Facilities Drawings 1,273 NZ$m 30 Jun 22 30 Jun 22 Syndicate 925 180 USPP 462 462 725 Capital Notes 350 350 Other 29 29 Total 1,766 1,021 Undrawn credit lines of $745m and ca
Slide 19: Dividend and share buyback
Dividend and share buyback Sustained strong ROFE of 19%, final dividend of 22.0 cps (fully imputed) reflecting business performance ROFE1 (%) Dividend (cps) 40.0 18.8% 19.3% ≥15% 65% pay-out ratio2 30.0 Dividends fully 22.0 imputed for NZ taxation purposes 18.0 Dividend to be paid on 6 October
Slide 20: Summary
Summary Strong performance momentum, well-positioned for further growth Strong FY22 earnings growth despite impact of COVID lockdowns in Q1 Delivering profitability levels and returns in line with (or ahead of) strategic objectives Seeing the benefits of price effectiveness (vs. input cost inf
Slide 21: Agenda
Agenda 1. Results Overview Ross Taylor 2. Financial Results Bevan McKenzie 3. Outlook Ross Taylor Fletcher Building Limited
Slide 22: FY23 outlook
FY23 outlook Significant near-term profit growth with industry backlog supporting next 12+ months Customers & forward indicators point to ongoing strong volumes in residential, commercial and infrastructure Strong pricing disciplines to cover inflation increases Performance improvements embedd
Slide 23: Our strategy positions us well to drive shareholder value
Our strategy positions us well to drive shareholder value in the short- and long-term 01 02 03 04 05 Significant Plans and Established Strong Well-positioned near-term runway for pipeline of enduring for macro profit growth further margin growth financial trends improvement investments – position
Slide 24: Appendix
Appendix Fletcher Building Limited
Slide 25: Building Products
Building Products FY22 results: strong Steel, civil sectors and finishing trades Gross Revenue ($m)1 EBIT ($m)1,2 FY22 trading performance 1,610 210 Revenue up 12%: uplift across Products, Pipes and Steel 198 1,436 EBIT up 6%: strong contribution from Steel (inventory uplift due to rise in steel
Slide 26: Distribution
Distribution FY22 results: significant second half margin of 9.0% achieved from operating leverage Gross Revenue ($m)1 EBIT ($m)1,2 FY22 trading performance 1,789 137 1,679 124 Revenue up 7%: strong demand from the residential sector EBIT up 10%, with significant 2H22 contribution reflecting sus
Slide 27: Concrete
Concrete FY22 results: top and bottom line initiatives delivering margin expansion and growth Gross Revenue ($m) EBIT ($m)1 FY22 trading performance 849 881 128 113 Revenue up 4%: strong demand across all key product segments through differentiated product offering and good pricing disciplines E
Slide 28: Australia
Australia FY22 results: second half margin 4.8%, strong improvements in Tradelink, FI & Iplex Gross Revenue ($m)1 EBIT ($m)1,2 FY22 trading performance 2,783 116 2,608 93 Revenue up 7% reflecting market activity in line with prior year. East Coast COVID restrictions slowed A&A work in 1H22 while w
Slide 29: Residential and Development
Residential and Development FY22 results: strong housing demand realised in earnings lift; constrained by construction & consenting delays Gross Revenue ($m) EBIT ($m)1 FY22 trading performance 734 692 217 Revenue 6% lower mainly from lower Industrial Development. In 48 Residential: 670 unit sales
Slide 30: Construction
Construction FY22 results: robust cost controls & operating efficiencies; COVID restrictions tough on productivity Gross Revenue ($m) EBIT ($m)1,2 FY22 trading performance 1,456 1,559 31 28 Revenue up 7%: increased building works at NZICC (nil margin) & WWB factory; $1.1b Infrastructure services &
Slide 31: Divisional revenue exposure and FB revenue by market
Divisional revenue exposure and FB revenue by market Divisional Revenue Exposure by Sector Total FB Revenue by Market (%) AU Building Resi, 44% Com, 28% Infra, 28% Infrastructure Products AU NZ Commercial Residential 4% 8% Distribution Resi, 78% Com, 21% 33% AU 18% Residential Concrete Resi, 44% Com