Slide 1: Half Year Results to 31 December 2012
FLETCHER BUILDING For personal use only HALF YEAR RESULTS TO 31 DECEMBER 2012 20 February 2013 Mark Adamson Chief Executive Officer Bill Roest Chief Financial Officer
Slide 2: Disclaimer
Half Year Results | Fletcher Building | © February 2013 | Page 2 Disclaimer For personal use only This half year results presentation dated 20 February 2013 provides additional comment on the media release of the same date. As such, it should be read in conjunction with, and subject to, the explanat
Slide 3: Agenda
Half Year Results | Fletcher Building | © February 2013 | Page 3 Agenda For personal use only • Results Overview • Divisional Performance • Financial Results • Business Transformation Programme • Outlook
Slide 4: Results Overview
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 4 Half Year Results RESULTS OVERVIEW For personal use only Stonefields housing development, Auckland
Slide 5: Results overview
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 5 Results overview For personal use only Net earnings of $146 million Operating earnings of $262 million In line with guidance given at ASM New Zealand earnings up, Australia down Cashflow from operations $204 million Up
Slide 6: Strong improvement in New Zealand residential consents, but Australia flat
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 6 Strong improvement in New Zealand residential consents, but Australia flat For personal use only Dec 2012 Dec 2011 Dec 2010 12/11 Building Consents 12 months 12 months 12 months %Mvmt New Zealand Residential Consents 1
Slide 7: Sustained trend in New Zealand residential consents over the past year
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 7 Sustained trend in New Zealand residential consents over the past year For personal use only Total residential consents; 12-month rolling – New Zealand and Australia 170,000 18,000 165,000 17,000 160,000 16,000 155,000
Slide 8: New Zealand earnings increase offset by decline in Australia
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 8 New Zealand earnings increase offset by decline in Australia For personal use only Dec 2012 Dec 2011 NZ$m 6 months 6 months % Change Sales 4,380 4,494 -3 EBITDA 374 372 +1 EBIT 262 256 +2 Net earnings 146 144 +1 Earnin
Slide 9: Strong improvement in New Zealand operating earnings but Australia down
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 9 Strong improvement in New Zealand operating earnings but Australia down on lower volumes For personal use only EBIT NZ$million 124 121 106 95 40 32 New Zealand Australia Rest of the World 6 months to Dec 12 6 mon
Slide 10: Earnings Commentary
Half Year Results | Fletcher Building | © February 2013 Results Overview | Page 10 Earnings Commentary For personal use only • First half performance driven by improved trading conditions and an increase in building consents in New Zealand • Strong improvement in Construction division due to increas
Slide 11: Divisional Performance
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 11 Half Year Results DIVISIONAL For personal use only PERFORMANCE Winstone Wallboards, Christchurch
Slide 12: Divisional operating earnings overview
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 12 Divisional operating earnings overview For personal use only EBIT NZ$million 72 64 63 56 53 51 42 39 37 25 17 15 Building Products Construction Crane Distribution Infrastructure Laminates and Products Panels Dec
Slide 13: Building Products result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 13 Building Products result For personal use only Dec 12 Dec 11 Plasterboard NZ$m 6 mths 6 mths %∆ Increase in operating earnings due to higher volumes. Sales 701 737 -5 Insulation EBITDA 76 83 -8 Operating earning
Slide 14: Building Products: earnings impacted by weak Australian market
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 14 Building Products: earnings impacted by weak Australian market For personal use only Gross Sales Dec 12 Dec 11 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ Building Products 307 314 -2 - Plasterboard ↑ ↑ ↑ -
Slide 15: Construction result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 15 Construction result For personal use only Dec 12 Dec 11 Uplift in Canterbury with strong new NZ$m 6 mths 6 mths %∆ residential house building and earthquake recovery work Sales 613 520 +18 +37 EBITDA 41 30 Const
Slide 16: Canterbury update
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 16 Canterbury update For personal use only Considerable progress on repairs 1,100 + firms contracted, 18,600 contractors inducted 47,000 emergency repairs completed 31,000 full scope repairs completed $1bn paid to
Slide 17: Crane result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 17 Crane result For personal use only Dec 12 Dec 11 Pipelines NZ$m 6 mths 6 mths %∆ Australia – declines in revenue from residential and mining sectors, offset Sales 1050 1229 -15 by increased gas sector activity.
Slide 18: Distribution result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 18 Distribution result For personal use only Dec 12 Dec 11 Operating earnings increased 13%, NZ$m 6 mths 6 mths %∆ driven by improvement in Auckland and Christchurch markets. Sales 424 387 +10 Pressure on margins c
Slide 19: Infrastructure Products result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 19 Infrastructure Products result For personal use only Dec 12 Dec 11 Cement, concrete & aggregates NZ$m 6 mths 6 mths %∆ New Zealand volumes rose in line with market activity: Sales 711 682 4 - Cement volumes up 2
Slide 20: Infrastructure Products: Increase in New Zealand construction activity drove volume growth
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 20 Infrastructure Products: Increase in New Zealand construction activity drove volume growth For personal use only Gross Sales Dec 12 Dec 11 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ Cement, concrete & 331 3
Slide 21: Laminates & Panels result
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 21 Laminates & Panels result For personal use only Dec 12 Dec 11 Formica NZ$m 6 mths 6 mths1 %∆ Operating earnings down 12% with additional costs of $3m from closure of Sales 881 939 -6 Bilbao. EBITDA Volumes in No
Slide 22: Laminates & Panels: volumes declined in Australia, Asia & Europe
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 22 Laminates & Panels: volumes declined in Australia, Asia & Europe, up marginally in North America For personal use only Gross Sales Dec 12 Dec 11 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ Australia - Lamine
Slide 23: Formica: decline in earnings due to Bilbao plant closure
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 23 Formica: decline in earnings due to additional costs of Bilbao plant closure and lower volumes in Europe For personal use only EBIT NZ$m 1H13 1H12 % Change Asia 21 18 17 North America 14 12 17 Europe (6) 2 - Cor
Slide 24: Financial Results
Half Year Results | Fletcher Building | © February 2013 Financial Results | Page 24 Half Year Results FINANCIAL For personal use only RESULTS Golden Bay Cement, Whangarei
Slide 25: $10m in restructuring costs taken above the line in HY13
Half Year Results | Fletcher Building | © February 2013 Divisional Performance | Page 25 $10m in restructuring costs taken “above the line” in HY13 For personal use only Reported EBIT EBIT Excluding restructuring and impairment charges 6 months to Dec 6 months to Dec 6 months to Dec 6 months to Dec
Slide 26: Cashflow from operations improved due to tighter working capital management
Half Year Results | Fletcher Building | © February 2013 Financial Results | Page 26 Cashflow from operations improved due to tighter working capital management For personal use only Dec 2012 Dec 2011 6 months 6 months % Change EBITDA 374 372 +1 Funding costs (75) (73) -3 Cash tax paid (41) (51) +20
Slide 27: Net debt movement
For personal use only Opening Net Debt 2,059 Cash from ops (pre working (217) capital) 13 Working capital Half Year Results | Fletcher Building | © February 2013 Growth Capex and 42 Acquisitions SIB Capex 52 Divestments (69) divestments Dividends 1028 Min Distn FX and Hedge (16) movement Closing Net
Slide 28: Forecast capital expenditure reduction of $58m versus FY12
Half Year Results | Fletcher Building | © February 2013 Financial Results | Page 28 Forecast capital expenditure reduction of $58m versus FY12 For personal use only Dec 12 Dec 11 FY13 Growth 6 mths 6 mths % ∆ Forecast Stay in business 100 353 Stay-in-business 52 101 -49 165 307 295* Growth¹ 31 22 +4
Slide 29: Key Ratios
Half Year Results | Fletcher Building | © February 2013 Financial Results | Page 29 Key Ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 47 40 24 35 36 35 31 14 14 27 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Dec-12 -27 Jun-08 Jun-09 Jun-10 Jun-11 Jun-
Slide 30: Debt maturity profile
Half Year Results | Fletcher Building | © February 2013 Financial Results | Page 30 Debt maturity profile For personal use only Funding and Maturity Profile Undrawn credit lines and cash on hand of $844 million. Average maturity of debt is 5 years. 206 Approximately 70 per cent of all borrowings 257
Slide 31: Business Transformation
Investor Presentation | Fletcher Building | © February 2013 Business Transformation | Page 31 Half Year Results BUSINESS For personal use only TRANSFORMATION PlaceMakers, Auckland
Slide 32: Transformation overview
Half Year Results | Fletcher Building | © February 2013 Business Transformation | Page 32 Transformation overview For personal use only A systemic review of Fletcher Building’s existing business model Multiple workstreams, including: - Shared services - Procurement - Distribution - Logistics - Opera
Slide 33: Shared services
Half Year Results | Fletcher Building | © February 2013 Business Transformation | Page 33 Shared services For personal use only Aimed at cost-reduction in core support functions and leveraging Fletcher Building’s scale Areas of focus: - Finance (accounts receivable, accounts payable, credit manageme
Slide 34: Procurement
Half Year Results | Fletcher Building | © February 2013 Business Transformation | Page 34 Procurement For personal use only Aimed at achieving coordination and cost savings from the $800m annual indirect third-party procurement spend across Fletcher Building Central group procurement function will l
Slide 35: Property
Half Year Results | Fletcher Building | © February 2013 Business Transformation | Page 35 Property For personal use only Total group property costs across New Zealand and Australia currently in excess of $250m per annum A review of the property portfolio currently underway - consolidate and rational
Slide 36: Outlook
Half Year Results | Fletcher Building | © February 2013 Outlook | Page 36 Half Year Results OUTLOOK For personal use only Iplex Pipelines, Harihari, NZ
Slide 37: Outlook FY2013
Half Year Results | Fletcher Building | © February 2013 Outlook | Page 37 Outlook FY2013 For personal use only New Zealand − Uplift in housing consents in first half should lift performance of businesses exposed to residential sector in the second half − Infrastructure projects continue to underpin
Slide 38: Financial outlook FY2013
Half Year Results | Fletcher Building | © February 2013 Outlook | Page 38 Financial outlook FY2013 For personal use only Guidance provided at Annual Shareholders Meeting confirmed. Operating earnings for the 2013 financial year are expected to be in the range of $560 million to $610 million, inclusi
Slide 39: Fletcher Building Half Year Results
FLETCHER BUILDING For personal use only HALF YEAR RESULTS TO 31 DECEMBER 2012 20 February 2013 Mark Adamson Chief Executive Officer Bill Roest Chief Financial Officer Jacobs Ladder Footbridge, Auckland