Slide 1: 2012 Annual Results Presentation
FLETCHER BUILDING For personal use only 2012 ANNUAL RESULTS PRESENTATION 22 August 2012 Jonathan Ling Chief Executive Officer Bill Roest Chief Financial Officer Mark Adamson Chief Executive – Laminates & Panels Hunua Quarry, Auckland
Slide 2: Disclaimer
Annual Results | Fletcher Building | © August 2012 | Page 2 Disclaimer For personal use only This annual results presentation dated 22 August 2012 provides additional comment on the media release of the same date. As such, it should be read in conjunction with, and subject to, the explanations and v
Slide 3: Agenda
Annual Results | Fletcher Building | © August 2012 | Page 3 Agenda For personal use only • Results Overview • Divisional Performance • Financial Results • Strategy & Outlook
Slide 4: Results Overview
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 4 Annual Results RESULTS OVERVIEW For personal use only ASB Wynyard Quarter, Auckland
Slide 5: Results overview
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 5 Results overview For personal use only Revenues up 20% to $8,873 million Includes full year contribution from Crane (3 months in FY11) Operating earnings $403 million, down 18% Operating earnings before restructuring and im
Slide 6: Residential consents in NZ improved whilst Australia continued to slow
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 6 Residential consents in NZ improved whilst Australia continued to slow For personal use only June 2012 June 2011 June 2010 12/11 Building Consents 12 months 12 months 12 months %Mvmt New Zealand Residential Consents 15,414
Slide 7: NZ housing consents – record low levels in first half of FY12
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 7 NZ housing consents – record low levels in the first half of FY12, modest improvement in second half For personal use only Residential Consents 12 month moving average 16,000 14,000 12,000 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10
Slide 8: Weak NZ and Australian construction markets adversely impacted earnings
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 8 Weak NZ and Australian construction markets adversely impacted earnings For personal use only June 2012 June 2011 NZ$m 12 months 12 months % Change Sales 8,873 7,416 +20 EBITDA¹ 786 801 -2 EBIT¹ 556 596 -7 Net earnings1 317
Slide 9: Geographic diversification has provided earnings stability
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 9 Geographic diversification has provided earnings stability despite cyclical downturn For personal use only • Revenue – FY12 EBIT¹– FY12 Rest of world: $90m 12% 16% New Zealand: $207m 41% 37% New Zealand Australia 47% Rest o
Slide 10: Restructuring and impairment charges
Annual Results | Fletcher Building | © August 2012 Results Overview | Page 10 Restructuring and impairment charges For personal use only Year to 30 June 2012 Restructuring and impairments charges NZ$ Million Before tax Tax After tax Laminex restructuring – Australia and New Zealand 54 (16) 38 Formic
Slide 11: Divisional Performance
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 11 Annual Results DIVISIONAL For personal use only PERFORMANCE Horsham, Victoria
Slide 12: Strong full year contribution from Crane, earnings up in Concrete
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 12 Strong full year contribution from Crane, earnings up in Concrete, other divisions down on lower volumes and/or margins For personal use only EBIT NZ$million1 168 139 130 125 111 106 83 72 60 50 48 39 29 27 Building
Slide 13: Building Products result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 13 Building Products result For personal use only June 12 June 11 Plasterboard operating earnings NZ$m 12 Mths 12 Mths %∆ down 10% due to lower volumes. Sales 670 692 -3 Insulation continued industry over- EBITDA¹ 97 13
Slide 14: Building Products: decline in insulation and plasterboard volumes
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 14 Building Products: decline in insulation and plasterboard volumes impacted earnings For personal use only Gross Sales June 12 June 11 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand Plasterboard 140 145
Slide 15: Concrete result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 15 Concrete result For personal use only NZ Concrete June 12 June 11 NZ$m 12 mths 12 mths %∆ • Revenues 3% higher with most product volumes similar or slightly up on prior Sales 958 912 +5 year; EBITDA • Cement and maso
Slide 16: Concrete: operational efficiencies lifted earnings
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 16 Concrete: operational efficiencies lifted earnings For personal use only Gross Sales June 12 June 11 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand 645 639 +1 Concrete: • Cement ↓ - ↓ • Readymix - ↓ ↑
Slide 17: Construction result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 17 Construction result For personal use only June 12 June 11 Tighter construction margins in NZ$m 12 mths 12 mths %∆ subdued market Sales 1,040 1,140 -9 Construction backlog increased to EBITDA 61 70 -13 $1,094m at end
Slide 18: Canterbury update
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 18 Canterbury update For personal use only • Residential repairs for Earthquake Commission: • 21 hubs established to carry out repairs • Over 20,000 home repairs completed to date • In addition, 45,000 emergency repairs
Slide 19: Crane – full year earnings overview
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 19 Crane – full year earnings overview For personal use only FY12 FY11 FY12 FY11 Sales Sales EBIT EBIT² NZ$M NZ$M¹ NZ$M NZ$M¹ %∆ Pipelines 791 674 59 46 +28 Tradelink 1,123 1,205 38 55 -31 Trade Distribution - NZ 363 37
Slide 20: Strong contribution from Crane in first full year of ownership
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 20 Strong contribution from Crane in first full year of ownership For personal use only • Operating earnings $106 million, up 15% on 2011 result • Pipelines: • Operating earnings up 28% to $59 million • Gross revenues u
Slide 21: Distribution result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 21 Distribution result For personal use only June 12 June 11 • Revenues down 5%, impacted by NZ$m 12 Mths 12 Mths %∆ continued low levels of residential Sales 813 856 -5 house building EBITDA 35 48 -27 • Increased compe
Slide 22: Laminates & Panels result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 22 Laminates & Panels result For personal use only June 12 June 11 Laminex NZ$m 12 mths 12 mths %∆ • Australian revenues down 9% due to Sales 1,849 1,979 -7 slowdown in residential and EBITDA¹ commercial markets Laminex
Slide 23: Laminates & Panels: volume declines in Australia and NZ
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 23 Laminates & Panels: volume declines in Australia and NZ, but growth in Asia and North America For personal use only Gross Sales June 12 June 11 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand Laminex 13
Slide 24: Formica: strong growth in operating earnings
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 24 Formica: strong growth in operating earnings before restructuring and impairment charges, driven by Asia and North America For personal use only EBIT NZ$m FY12 FY11 % Change Asia 38 34 +12 North America 34 28 +21 Eur
Slide 25: Steel result
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 25 Steel result For personal use only June 12 June 11 • Lower rollforming volumes in NZ$m 12 Mths 12 mths %∆ Australia, margins impacted by increased competition Sales 1,150 1,214 -5 • Long steel margins impacted by EBI
Slide 26: Steel: margin pressure across the division
Annual Results | Fletcher Building | © August 2012 Divisional Performance | Page 26 Steel: margin pressure across the division For personal use only Gross Sales June 12 June 11 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand Long Steel 269 247 +9 ↑ ↓ ↓ Coated Steel 166 176 -6 ↓ - ↓ Dis
Slide 27: Financial Results
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 27 Annual Results FINANCIAL For personal use only RESULTS Whangarei Golden Bay Cement, Portland
Slide 28: Net earnings
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 28 Net earnings For personal use only June 2012 June 2011 NZ $m 12 months 12 months %∆ EBIT1 556 596 -7 Interest¹ 152 118 +29 Tax1 79 111 -29 Minority Interests 8 8 - Net Earnings before restructuring 317 359 -12 and impairm
Slide 29: Operating earnings – 1st Half compared with 2nd Half
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 29 Operating earnings before restructuring and impairment charges – 1st Half compared with 2nd Half For personal use only 6 months June 2012 6 months Dec 2011 (2nd half) (1st half) NZ$M Revenue EBIT Revenue EBIT Building Pro
Slide 30: Cashflow from operations up 11%
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 30 Cashflow from operations up 11% For personal use only June 2012 June 2011 12 months 12 months % Change EBITDA 633 697 -9 Funding costs (152) (122) +25 Cash tax paid (123) (86) +43 Non cash restructuring/impairment 122 89
Slide 31: Net debt movement
For personal use only NZ$ m Opening Net Debt Cash from ops 1,892 before working (457) capital Annual Results | Fletcher Building | © August 2012 9 Working capital Growth Capex 146 SIB Capex 217 Divestments (27) Dividends 201 13 Min Distn FX on Debt (16) Actual YTD Debt 1,978 Increase in net debt due
Slide 32: Budgeted capital expenditure to reduce in FY13
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 32 Budgeted capital expenditure to reduce in FY 13 For personal use only Capital Expenditure June 12 June 11 FY13 363 12 mths 12 mths % ∆ Budget 307 96 * Budget Stay-in-business 207 200 +4 162 56 264* 246* Growth¹ 60 51 +18
Slide 33: Key ratios
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 33 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 Jun-12 -27 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Ju
Slide 34: Debt maturity profile
Annual Results | Fletcher Building | © August 2012 Financial Results | Page 34 Debt maturity profile For personal use only Funding and Maturity Profile • Undrawn credit lines of $782 million June 2012 and cash on hand of $168 million. 200 • Average maturity of debt is 5 years. 30 352 200 • Average i
Slide 35: Strategy & Outlook
Annual Results | Fletcher Building | © August 2012 Strategy & Outlook | Page 35 Annual Results STRATEGY & For personal use only OUTLOOK Formica, Topshop London
Slide 36: Strategy
Annual Results | Fletcher Building | © August 2012 Strategy & Outlook | Page 36 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 mo
Slide 37: Outlook FY2013
Annual Results | Fletcher Building | © August 2012 Strategy & Outlook | Page 37 Outlook FY2013 For personal use only New Zealand: • Continued modest improvement in new house building − Assisted by low interest rates and increased activity in Canterbury • Commercial and infrastructure activity not ex
Slide 38: 2012 Annual Results Presentation
Annual Results | Fletcher Building | © August 2012 Strategy & Outlook | Page 38 FLETCHER BUILDING For personal use only 2012 ANNUAL RESULTS PRESENTATION 22 August 2012 Jonathan Ling Chief Executive Officer Bill Roest Chief Financial Officer Mark Adamson Chief Executive – Laminates & Panels Hunua Qua