Fletcher Building Limited · NZX:FBU
Fletcher Building — Goldman Sachs JBWere Australasian Investment Forum 2009
39 slides from Fletcher Building's conference presentation, Sep 10, 2009
Slide 1: Goldman Sachs JBWere Australasian Investment Forum
1 For personal use only Goldman Sachs JBWere Australasian Investment Forum 10-11 September 2009 Bill Roest Chief Financial Officer Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
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’s actual results could di
Slide 3: Agenda
3 For personal use only Agenda • Company Overview • Strategy • Divisional Performance • Financial Results • Outlook Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 4: Company Overview
4 For personal use only Company Overview Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 5: Fletcher Building at a glance
5 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Fletcher Building at a glance For personal use only New Zealand Retail 20% 22% Asia 3% Europe 6% North Australia America 16% 31% Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 6: Market leading business
6 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Market leading business For personal use only Building Distribution Infrastructure Laminates Steel Products & Panels Steel Plasterboard Building Materials Construction The Laminex Group Coated Steel Insulation Distr
Slide 7: Fletcher Building has a vertically integrated value chain
7 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Fletcher Building has a vertically integrated value chain For personal use only Laminates Building Other Steel Concrete & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Distribution D
Slide 8: Strategy
8 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Strategy Longer term strategy continues to be: • improve earnings reliability • maintain and improve internal capabilities • pursue acquisition opportunities where these meet key investment cri
Slide 9: Residential construction activity
9 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Residential construction activity Jun 2009 Jun 2008 Jun 2007 09/08 Building Consents 12 months 12 months 12 months % Mvmt New Zealand 12,503 20,902 23,344 -40 Australia 132,073 162,732 153,400
Slide 10: Divisional Performance
10 For personal use only Divisional Performance Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 11: Strong performance in Steel, other businesses had lower volumes and margins
11 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Strong performance in Steel, other businesses typically had lower volumes and margins EBITDA NZ$million1 296 255 214 171 175 159 131 123 82 80 40 18 Building Distribution Infrastructure Proper
Slide 12: Building Products
12 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation|Tasman Insulation NZ|Forman Grou
Slide 13: Building Products result
13 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products result Jun 09 Jun 08 • Plasterboard performance NZ$m 12 mths 12 mths %∆ impacted by low NZ housing Sales 771 739 +4 starts. EBITDA1 131 171 -23 • Insulation in NZ & Australia
Slide 14: Building Products: volumes lower but improved trend in Insulation
14 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products: volumes typically lower but improved trend in Insulation due to government stimulus Gross Sales Jun 09 Jun 08 NZ$m 12 mths 12 mths1 %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand
Slide 15: Distribution: PlaceMakers
15 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Distribution For personal use only PlaceMakers The premier suppliers of building materials to New Zealand’s commercial and residential construction markets • 63 outlets across New Zealand principally trading as Pla
Slide 16: Distribution result
16 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Distribution result Jun 09 Jun 08 • Sales impacted by weak NZ NZ$m 12 mths 12 mths %∆ housing starts but market share Sales 883 1,083 -18 maintained. EBITDA1 40 82 -51 • Significant staff redu
Slide 17: Infrastructure
17 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Infrastructure For personal use only Concrete New Zealand Firth|Humes Pipeline Systems|Golden Bay Cement|Winstone Aggregates • 25% of NZ aggregates markets • 50% of NZ cement market • 33% of NZ readymix concrete ma
Slide 18: Infrastructure result
18 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Infrastructure result NZ Concrete Jun 09 Jun 08 • Volume declines in cement, NZ$m 12 mths 12 mths %∆ aggregates, readymix, masonry Sales 2,052 1,857 +11 and concrete pipe. • Reflects weaker re
Slide 19: Infrastructure: strong construction levels offset lower concrete volumes
19 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Infrastructure: strong construction levels helped to partly offset lower concrete volumes Gross Sales Jun 09 Jun 08 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand - NZ Concrete
Slide 20: Property activities include quarry end use, residential and surplus assets
20 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Property activities include quarry end use, residential and surplus assets EBIT NZ$m 2009 2008 2007 2006 Quarry end use 0 42 6 0 Residential 12 19 34 25 Surplus assets 6 19 9 10 Total 18 80 49
Slide 21: Laminates & Panels
21 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Laminates & Panels For personal use only Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market shares – Decorated board – No.1 – Medium density fibreboard – No.2 – Particleb
Slide 22: Laminates & Panels result
22 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Laminates & Panels result Jun 09 Jun 08 Laminex NZ$m 12 mths 12 mths %∆ • Volumes down in NZ and Sales 2,076 2,132 -3 Australia, export markets weak. • Significant input cost increases in EBIT
Slide 23: Laminates & Panels: Asian region stronger, other markets weaker
23 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Laminates & Panels: Asian region stronger overall but all other markets were weaker Gross Sales Jun 09 Jun 08 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand - Laminex 178 230 -2
Slide 24: Formica growth in Asia and North America turnaround boosted result
24 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Formica growth in Asia and North America turnaround boosted result, but Europe weak EBITDA NZ$m1 2H09 1H09 2H08 1H08 Asia 19 20 14 16 North America 17 2 -17 10 Europe 8 9 30 22 Corporate -9 -6
Slide 25: Steel
25 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook Steel For personal use only Rollforming and Coated Steel Pacific CoilCoaters|Stramit Building Products|Dimond • Approx. 25% of Australian market (Stramit) • Major player in New Zealand roofing market (Dimond) Long
Slide 26: Steel result
26 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Steel result Jun 09 Jun 08 • Strong result in first half NZ$m 12 mths 12 mths %∆ reflected high steel prices and Sales 1,321 1,279 +3 strong demand. EBITDA1 175 123 +42 • Second half sales 30%
Slide 27: Steel: strong first half, volumes lower in second half
27 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Steel: strong first half, but volumes lower in second half Gross Sales Jun 09 Jun 08 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand - Long Steel 361 288 +25 ↓ ↑ ↑ - Coated produ
Slide 28: Financial Results
28 For personal use only Financial Results Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 29: FY09 annual results summary
29 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only FY09 annual results summary Jun 2009 Jun 2008 NZ$m 12 months 12 months % Change Sales 7,103 7,091 EBITDA¹ 769 966 -20 EBIT¹ 558 768 -27 Net earnings1 314 467 -33 Unusual items after tax -360 0
Slide 30: Focus on optimising cash has proven beneficial
30 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Focus on optimising cash has proven beneficial • Cashflow from operations up 23% to $533 million, driven by: • reduction in debtors of $203 million • reduction in inventory of $101 million • C
Slide 31: Unusual items reflect pro-active stance in re-basing operations
31 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Unusual items reflect pro-active stance in re-basing operations for lower volumes • Redundancy and restructuring costs: $43 million (after tax) • labour reduction of 2,500 to 16,500 across the
Slide 32: Other unusual items
32 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Other unusual items • Adjustments to asset carrying values: $157 million (after tax) • reduction in goodwill for Formica: $56 million • impairment of fixed assets in Formica: $65 million • IT
Slide 33: Balance sheet strengthened with equity raising and higher operating cashflow
33 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Balance sheet strengthened with equity raising and higher operating cashflow Jun 2009 Jun 2008 NZ $m 12 months 12 months %∆ Operating Cashflow 533 434 +23 Net Debt 1,350 1,846 -27 Net Debt / N
Slide 34: Net debt movement
34 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Net debt movement 2400 NZ$m 1,846 2000 533 20 226 292 1600 47 67 1,350 (52) 1200 (432) (148) (516) 800 400 0 NZ pension top Opening Debt FX on Debt Closing Debt Cash from ops Capex Divestments
Slide 35: Key ratios
35 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Key ratios Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 44.4 61 40.1 37.1 40 42 31.1 22.2 14 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09
Slide 36: Debt maturity profile
36 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Debt maturity profile • No significant refinancing Funding and Maturity Profile until 2013, with undrawn credit lines of over $1 billion. June 2009 Excluding Cash of NZ$43 million 400 Average
Slide 37: Outlook
37 For personal use only Outlook Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
Slide 38: Outlook 2010
38 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Outlook 2010 • Subdued outlook for FY10 with low activity levels expected in most markets. • Infrastructure spending in NZ and Australia will assist construction, concrete and steel businesses
Slide 39: For personal use only
39 Company Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Goldman Sachs JBWere Australasian Investment Forum | 10 & 11 September 2009
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