Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (November 2010)
35 slides from Fletcher Building's shareholder meeting presentation, Nov 17, 2010
Slide 1: 2010 Annual Shareholders' Meeting
1 For personal use only Fletcher Building Limited 2010 Annual Shareholders’ Meeting 17 November 2010 Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 2: Mr Ralph Waters, Chairman
2 For personal use only Mr Ralph Waters Chairman Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 3: Directors
3 For personal use only Directors Ralph Waters (Chairman) T Tony Carter C Hugh Fletcher Dr Alan Jackson John Judge Jonathan Ling (Managing Director) Gene Tilbrook Kerrin Vautier Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 4: Meeting agenda
4 For personal use only Meeting agenda • Chairman’s overview • Chi f E Chief Executive i Offi Officer’s ’ address dd • Trading outlook • Shareholder questions and discussion • Consideration of, and voting on, the resolutions of the meetingg Annual Shareholders’ Meeting | Fletcher Building | © 17 Nov
Slide 5: Most residential markets have improved but remain well below long term averages
5 For personal use only Most residential markets have improved but remain well below long term averages 000’s June 2010 June 2009 June 2008 Building Consents 12 months 12 months 12 months New Zealand 16 14 23 Australia 166 133 163 US¹ 549 581 1089 England 98 68 140 Spain 100 160 422 1. Seasonally ad
Slide 6: For personal use only
6 For personal use only Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 7: FY2010 Results
7 For personal use only FY2010 Results June 2010 June 2009 NZ$M %∆ 12 months 12 months Sales 6,799 7,103 -4 EBIT 521 558 -7 Net Earnings¹ 301 314 -4 Unusual items after tax -29 -360 Net Earnings 272 -46 1. Before unusual items Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 8: Divisional operating earnings
8 For personal use only Divisional operating earnings EBIT NZ$million1 185 154 144 141 114 106 74 82 38 30 20 18 8 Building Distribution Infrastructure Property Laminates & Steel Products 12 months ended Panels June 2010 June 2009 1. Earnings before interest, tax, and unusual items Annual Shareholde
Slide 9: Cashflow from operations
9 For personal use only Cashflow from operations NZ$m 560 533 522 483 434 Year to 30 June 2006 2007 2008 2009 2010 Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 10: Gearing reduced further with cash retained in the business
10 For personal use only Gearing reduced further with cash retained in the business Net debt/ net debt plus equity Percentage 40% 4 37% 31% 27% 22% Year to 30 June 2006 2007 2008 2009 2010 Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 11: Total shareholder return
11 For personal use only Total shareholder return Percentage 40% 4 42% 24% 14% -43% Year to 30 June 2006 2007 2008 2009 2010 Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 12: Changes to the board
12 For personal use only Changes to the board Directors retired during the year as part of planned succession arrangements: arrangements • Roderick Deane – retired as Chairman as at 31 March 2010 • S Sir Dryden yde Sp Spring g New director appointed: • Tony Carter Annual Shareholders’ Meeting | Flet
Slide 13: For personal use only
13 For personal use only Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 14: Jonathan Ling, Chief Executive Officer
14 For personal use only Jonathan Ling Chief Executive Officer Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 15: Building Products result
15 For personal use only Building Products result June 10 June 09 • Plasterboard benefited from NZ$m 12 mths 12 mths %∆ improved NZ housing starts and from cost-out initiatives Sales 798 771 +4 • Insulation earnings impacted by $18m charge due to Australian EBIT1 114 106 +8 government’s withdrawal o
Slide 16: Distribution result
16 For personal use only Distribution result June 10 June 09 • Sales stable year on year with a NZ$m 12 mths 12 mths %∆ pick-up pick up in activity in second half from increase in residential house Sales 878 883 -1 building. EBIT1 38 30 +27 • 27% growth in operating earnings driven by cost reduction
Slide 17: Infrastructure result
17 For personal use only Infrastructure result June 10 June 09 NZ Concrete NZ$m 12 mths 12 mths %∆ • gg g Lower volumes in cement, aggregates, readymix and concrete pipe. Sales 2,020 2,052 -2 • Softness in commercial construction activity only partly offset by increase in residential construction. E
Slide 18: Laminates & Panels result
18 For personal use only Laminates & Panels result June 10 June 09 Laminex NZ$m 12 mths 12 mths %∆ • g Australian domestic volumes higher due to improved residential, but export volumes Sales 1,930 2,076 -7 declined with plant closure. • NZ volumes down due to slowdown in commercial sector. EBIT1 14
Slide 19: Steel result
19 For personal use only Steel result June 10 June 09 • Volatile operating environment NZ$m 12 mths 12 mths %∆ with uncertain demand and declining prices. Sales 1,172 1,321 -11 • Long steel prices down 30% but volumes l 5% h higher h d driven b by EBIT1 82 154 -47 exports. • Lower rollforming and co
Slide 20: Health and safety measures continued to improve
20 For personal use only Health and safety measures continued to improve 60 40 20 Total recordable i j i per injuries million hours 0 worked 2006 2007 2008 2009 2010 Year to 30 June Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 21: New Zealand emissions trading scheme
21 For personal use only New Zealand emissions trading scheme • New Zealand’s emissions trading scheme (ETS) effective from 1 July, 2010. • Most off our operations i d do not di directly l participate i i iin the h ETS, b but are subject bj to higher energy costs. • Fletcher’s cement and steel manuf
Slide 22: Strategy
22 For personal use only Strategy Longer term strategy continues to be: • improve i earnings i reliability li bilit • maintain and improve internal capabilities – increased focus on g growth oriented capex p – business transformation initiatives • pursue acquisition opportunities where these meet ke
Slide 23: Strategy: aspirations by geography
23 For personal use only Strategy Our aspirations by geography: New Zealand Maintain and extend domestic businesses, strengthen channels to market. A Australia li C Create the h leading l di Australasian A l i b building ildi products d and construction materials business by establishing strong mark
Slide 24: Investment focus is shifting to growth-orientated initiatives
24 For personal use only Investment focus is shifting to growth-orientated growth orientated initiatives • Increased focus on organic growth opportunities • Stay-in-business Stay in business capex approx. 60% of depreciation • Investment capex includes acquisitions: – Australian Construction Product
Slide 25: Capital expenditure will increase in FY2011 to support growth initiatives
25 For personal use only Capital expenditure will increase in FY2011 to support growth initiatives 350 322* 289 8 300 250 211 213 206 191 * 200 150 100 50 0 2009 2010 2011 Capital Expenditure Depreciation •* Forecast Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 26: For personal use only
26 For personal use only Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 27: Impact of Canterbury earthquake
27 For personal use only Impact of Canterbury earthquake • All of the company’s Canterbury based businesses are back up and running • Trading di iin Canterbury b h has b been quiet i while hil repairs i are assessed d and d iinsurance claims are lodged • g No significant impact p on trading g result
Slide 28: Watertightness – fixing leaky homes
28 For personal use only Watertightness – fixing “leaky leaky homes” homes • PWC report to government of March 2010 estimated 22,000 to 89,000 dwellings affected • Consensus forecast is 42,000 dwellings require repair, at a total cost of $11.3 billion – 10 years for complete remediation • New scheme
Slide 29: For personal use only
29 For personal use only Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 30: Mr Ralph Waters, Chairman
30 For personal use only Mr Ralph Waters Chairman Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 31: Market Outlook 2011
31 For personal use only Market Outlook 2011 Caution required in formulating outlook for 2011: N New Z Zealand: l d • Gradual recovery in residential building activity, with impetus from Canterbury rebuilding and leaky home remediation • Commercial construction activity improving from low levels. •
Slide 32: Market Outlook 2011
32 For personal use only Market Outlook 2011 Australia: • Housing H i starts t t and d commerciali l construction t ti activity ti it will ill b be influenced by economic performance of each state • Residential building activity expected to be sustained • Commercial likely to remain subdued • Infras
Slide 33: Market Outlook 2011
33 For personal use only Market Outlook 2011 Asia: China and SE Asian markets have continuing good growth North America: gradual improvement likely, but timeframe uncertain Europe: No significant growth anticipated Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
Slide 34: Performance outlook
34 For personal use only Performance outlook • Current range of analysts’ forecasts of net earnings for FY2011 is NZ$311 million to $405 million, with an average of $357 million • Trading performance in first 4 months of FY2011 has been on budget and ahead of the same period in both halves of FY2010
Slide 35: 2010 Annual Shareholders' Meeting
35 For personal use only Fletcher Building Limited 2010 Annual Shareholders’ Meeting 17 November 2010 Annual Shareholders’ Meeting | Fletcher Building | © 17 November 2010
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