Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (October 2016)
48 slides from Fletcher Building's shareholder meeting presentation, Oct 18, 2016
Slide 1: 2016 Annual Shareholders' Meeting
For personal use only Fletcher Building Limited Working with you 2016 Annual Shareholders’ Meeting 18 OCTOBER 2016
Slide 2: Sir Ralph Norris, Chairman
Fletcher Building Annual Shareholders’ Meeting 2016 For personal use only Working with you Sir Ralph Norris Chairman
Slide 3: Directors
Directors For personal use only Sir Ralph Norris (Chairman) Tony Carter Dr Alan Jackson John Judge Mark Adamson (Managing Director) Kathryn Spargo Cecilia Tarrant Steve Vamos 3 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 4: Meeting Agenda
Meeting Agenda For personal use only Chairman’s address • Overview of 2016 financial performance Chief Executive Officer’s address • 2016 operational review • Update on strategic priorities • Trading and financial outlook General business Voting on resolutions 4 Fletcher Building Annual Shareholders
Slide 5: Canterbury
Canterbury For personal use only 5 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 6: Net earnings
Net earnings For personal use only 2015 2016 $270m $462m Before significant items: Before significant items: $399m $418m 6 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 7: Operating earnings before interest and tax (EBIT)
Operating earnings before interest and tax (EBIT) For personal use only 2015 2016 $503m $719m EBIT before significant items: EBIT before significant items: $653m $682m 7 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 8: Cashflow from operations
Cashflow from operations For personal use only 2015 2016 $575m $660m 8 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 9: Stronger performance from Australia in FY16
Stronger performance from Australia in FY16 For personal use only External Revenue EBIT¹ 14 11 23 53 33 66 New Zealand Australia Rest of World 1. Before significant items 9 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 10: New Zealand residential consents
New Zealand residential consents For personal use only Total residential consents¹ 35,000 Peak (2004) 30,000 25,000 Long term average (2001-2015) 20,000 15,000 10,000 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Source: Statistics NZ, Infometrics 1 – Twelve months rolling 10 Fletcher Building An
Slide 11: Australian residential consents
Australian residential consents For personal use only Total residential approvals¹ 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 Jun-16 Jun-15 Jun-14 Dec-15 Jun-13 Dec-14 Dec-13 Aug-15 Oct-15 Aug-14 Oct-14 Apr-16 Aug-13 Oct-13 Apr-15 Apr-14 Feb-16 Feb-15 Feb-14 Standalone Houses
Slide 12: Rest of World operating earnings
Rest of World operating earnings For personal use only EBIT¹ NZ$m 80 67 Rest of World 12 months to 30 June 15 12 months to 30 June 16 1. Before significant items 12 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 13: Dividend
Dividend For personal use only 2015 total dividend 2016 total dividend 37 cents 39 cents Both interim and final dividends are expected to be fully imputed for New Zealand taxation purposes from FY17 to FY19 13 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 14: Total shareholder return
Total shareholder return For personal use only Percentage 51 9 11 -3 -27 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 14 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 15: Total shareholder returns over past years
Total shareholder returns over past 4 years For personal use only +78 % 2012 2016 15 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 16: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only Debt/Debt Plus Equity Percentage 37 33 32 32 27 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 16 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 17: Health and safety performance
Health and safety performance For personal use only Total recordable injury frequency rate* 57.5 43.9 25.8 25.2 14.0 11.1 8.5 6.8 6.0 6.4 6.7 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 * Total injuries per million employee and contractor hours 17 Fletcher Building Annual Shareholders’ Me
Slide 18: Portfolio rationalisation completed
Portfolio rationalisation completed For personal use only Rocla Quarry Products sale completed in January 2016 • Total consideration NZ$212m • Gain on sale of NZ$85m Joint Venture between Fletcher Aluminium and Nalco commenced July Purchase of Higgins road construction and maintenance business compl
Slide 19: Mark Adamson, Chief Executive Officer
Fletcher Building Annual Shareholders’ Meeting 2016 For personal use only Working with you Mark Adamson Chief Executive Officer
Slide 20: New Zealand Building Products highlights
New Zealand Building Products highlights For personal use only Volume growth driven by strong New Zealand cycle: • Cement +6% • Concrete +7% • Plasterboard +11% • Insulation +13% 20 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 21: Distribution highlights
Distribution highlights For personal use only Strong revenue growth: • PlaceMakers revenue +10% • Mico revenue +12% • Steel Distribution EBIT +22% 21 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 22: Construction highlights
Construction highlights For personal use only Revenue growth of +29% Revenue exceeded $1.5b for the first time Backlog at 30 June 2016 stood at $2.7b 22 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 23: Residential highlights
Residential highlights For personal use only Fletcher Living 12% growth in operating earnings Good progress in achieving the land supply needed for next 3 years Earnings include $10m contribution from the development of surplus land holdings 23 Fletcher Building Annual Shareholders’ Meeting | © Octo
Slide 24: Australian operating earnings up 31%
Australian operating earnings up 31% For personal use only EBIT¹ NZ$m 151 115 Australia 12 months to 30 June 15 12 months to 30 June 16 1. Before significant items ad excluding corporate costs 24 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 25: Lifting performance in our Australian businesses
Lifting performance in our Australian businesses For personal use only • Business returned to profitability in the second half • Improvement driven by increased efficiencies, improved customer service and cost reductions • Earnings doubled over the past year • Re-opening Rooty Hill plant in Sydney •
Slide 26: International businesses
International businesses For personal use only June 2015 June 2016 % EBIT (NZ$m)¹ 12 months 12 months change Formica North America 49 56 +14 Formica Asia 19 23 +21 Formica Europe 0 -17 N/M Roof Tile Group 14 14 - Laminex 81 80 -1 1. EBIT: Operating earnings before interest, tax and significant items
Slide 27: Strategy priorities
Strategy priorities For personal use only Target organic growth • Residential: New Zealand Deliver sustained uplift in • Construction: New Zealand and South performance of all Pacific businesses, leverage centres • Distribution: New Zealand and Australia of excellence established • Manufacturing: Gr
Slide 28: Profitable Growth: Residential
Profitable Growth: Residential For personal use only Goal to increase historical average of 300 homes p.a. to 1,500 homes p.a. • Continue to buy completed lots from developers • Purchase bare land for development • Partnerships with government to develop existing land Expect to invest a further $160
Slide 29: Profitable Growth: Construction
Profitable Growth: Construction For personal use only Contracted order book $2.7b as at 30 June Higgins contracting business acquisition completed in July Key contracts won include NZ International Convention Centre and Commercial Bay 29 Fletcher Building Annual Shareholders’ Meeting | © October 201
Slide 30: Profitable Growth: Distribution
Profitable Growth: Distribution For personal use only Distribution portfolio has 11 businesses across New Zealand and Australia which are well recognised within their markets 1st or 2nd in their markets Well established brands 30 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 31: Efficiency: Work smarter together
Efficiency: Work smarter together For personal use only Accelerate programme leverages capability of FBUnite Commercial • Revenue growth • Product margin growth Cost reduction • External expenditure • Overhead costs Manufacturing and operational • Manufacturing products efficiency • Distribution cos
Slide 32: People: Building our people capability
People: Building our people capability For personal use only Continued investment in our people and capability Continued mission making Fletcher Building a great company to work for Build capability across all levels of the organisation 1,200 Higgins employees joined at the end of July 32 Fletcher B
Slide 33: Outlook FY17
Outlook FY17 For personal use only New Zealand • Residential consents expected to peak in FY18, but lag could mean peak activity occurs after this • Non-residential activity forecast to remain steady at elevated levels • Infrastructure work undertaken expected to continue to grow Australia • Residen
Slide 34: Outlook FY17
Outlook FY17 For personal use only Rest of World • Asia: moderating growth in China, modest growth in Taiwan and SE Asian markets • North America: relatively low growth, USA higher growth than Canada • Europe: mixed outlook for Continental Europe, UK expect to grow modestly 34 Fletcher Building Annu
Slide 35: Financial Outlook FY17
Financial Outlook FY17 For personal use only Operating Earnings (EBIT) expected to be in the range of $720m to $760m Earnings from Higgins acquisition should offset the impact of discontinued operations: • Pacific Steel • Rocla Quarry Products • Fletcher EQR 35 Fletcher Building Annual Shareholders’
Slide 36: Sir Ralph Norris, Chairman
Fletcher Building Annual Shareholders’ Meeting 2016 For personal use only Working with you Sir Ralph Norris Chairman
Slide 37: General Business
General Business For personal use only 37 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 38: Electronic voting instructions
Fletcher Building Annual Shareholders’ Meeting 2016 For personal use only Working with you Electronic voting instructions 38
Slide 39: Handset instructions - inserting your smartcard
Handset instructions - inserting your smartcard For personal use only • The smartcard should be inserted into your handset • If the smartcard is not inserted into your handset please do so now • Make sure the chip at the bottom of the smartcard is inserted and facing you • A welcome message will bri
Slide 40: Handset instructions - casting your vote
Handset instructions - casting your vote For personal use only When the poll opens, the handset will display the voting options Press: • Button 1 to vote For the resolution • Button 2 to vote Against the resolution • Button 3 to Abstain your vote 40 Fletcher Building Annual Shareholders’ Meeting | ©
Slide 41: Handset instructions - casting your vote
Handset instructions - casting your vote For personal use only • Confirmation that your vote has been received will appear on the screen • To change your vote, simply enter your new choice (1, 2 or 3) to overwrite your previous selection • If you wish to cancel your vote, press the ‘X’ button 41 Fle
Slide 42: Test resolution
For personal use only Test resolution Morning tea is served after the meeting 42 Fletcher Building Annual Shareholders’ Meeting | © October 2016
Slide 43: Resolution voting
Fletcher Building Annual Shareholders’ Meeting 2016 For personal use only Working with you Resolution voting
Slide 44: Re-election of Antony John Carter
For personal use only Resolution 1 Re-election of Antony John Carter
Slide 45: Re-election of Dr Alan Trevor Jackson
For personal use only Resolution 2 Re-election of Dr Alan Trevor Jackson
Slide 46: Re-election of Sir Ralph James Norris
For personal use only Resolution 3 Re-election of Sir Ralph James Norris
Slide 47: Auditor's remuneration
For personal use only Resolution 4 Auditor’s remuneration
Slide 48: 2016 Annual Shareholders' Meeting
For personal use only Fletcher Building Limited Working with you 2016 Annual Shareholders’ Meeting 18 OCTOBER 2016 48
Fletcher Building — Shareholder Meeting (October 2016) on 6ix