Slide 1: Infrastructure Division Analysts' Presentation
Infrastructure Division For personal use only Mark Binns Sydney 2008 Analysts’ Presentation Growing Infrastructure
Slide 2: Cautionary Statement
Cautionary Statement For personal use only 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
Slide 3: Continuing strong financial performance…
Continuing strong financial performance… For personal use only Growing Infrastructure Infrastructure
Slide 4: … despite declining product volumes
… despite declining product volumes For personal use only Growing Infrastructure Infrastructure
Slide 5: Building on a solid core: 1H 2007 – 1H 2008
Building on a solid core: 1H 2007 – 1H 2008 PCP comparison NZ For personal use only CONCRETE & AGGREGATES CEMENT PRODUCTS CONSTRUCTION Revenue +0% Revenue +10% Revenue -9% Revenue -5% EBIT -13% EBIT +8% EBIT - 9% EBIT +26% Market 40% Market 52% Market 30% Backlog $1.2b share share share (Auckland) (
Slide 6: Building diversity: 1H 2007 – 1H 2008
Building diversity: 1H 2007 – 1H 2008 PCP comparison Australia For personal use only ROCLA PIPES ROCLA QUARRIES Revenue +19% Revenue 0% EBIT +35% EBIT 0% Market share 35% Sydney market remains soft. NSW & Victoria are challenging. Other states are strong, QLD is strong. - particularly QLD Source: Ro
Slide 7: Infrastructure: a positive environment
Infrastructure: a positive environment Public infrastructure work increasing For personal use only Source: Fletcher Construction backlog Growing Infrastructure Infrastructure
Slide 8: Infrastructure: major projects
Infrastructure: major projects For personal use only Source: Fletcher Construction Growing Infrastructure Infrastructure
Slide 9: Reducing production costs
Strategic focus: reducing production costs For personal use only • Price increases restrained by competitive pressure. • Price increase of $5.60 per tonne announced, effective 1 February 2008. • Production output ahead of expectation; no clinker imported! • Manufacturing costs reduced. Source: Golde
Slide 10: Maintaining margin
Strategic focus: maintaining margin For personal use only • Price increases more difficult to achieve. • Operational improvements are reducing costs further this year. • Hunua volumes down – both roading and manufacturing (RMC and asphalt.) Growing Infrastructure Infrastructure
Slide 11: Maintaining margin
Strategic focus: maintaining margin For personal use only • Price leadership. • Demand conditions might lead to softer prices. • Increased material and distribution costs have been successfully passed on. Growing Infrastructure Infrastructure
Slide 12: Production efficiencies
Strategic focus: production efficiencies For personal use only • Price increases more subdued. • Significant EBIT growth has now slowed. • Slow 1st half likely to be followed by bigger 2nd half. • Highest backlog ever. • Manufacturing upgrade for Papakura is to proceed – with good efficiency gains.
Slide 13: Divest under-performing assets
Strategic focus: divest under-performing assets For personal use only Stresscrete Firth Peru Other $40-50m Growing Infrastructure Infrastructure
Slide 14: Organic growth
Strategic focus: organic growth For personal use only • .NZ Aggregates: acquisitions • Cameron’s Quarry (Bay of Plenty); • Land for future development. • NZ Concrete: investments • Four new plants; • Masonry plant upgrade. • NZ Concrete Pipe: investment • Plant upgrade at Papakura. Growing Infrastru
Slide 15: Organic growth
Strategic focus: organic growth For personal use only • .Australia Concrete Pipe / Products: expansion • Sleeper upgrade completed; • Copa Water acquired; • Rockhampton pole plant upgrade. • NZ Roading Products: ‘bolt on’ • Armorflex acquired; • Trenchshoring NZ Ltd established (JV). • Australian Qu
Slide 16: Positioning for organic growth
Strategic focus: positioning for organic growth For personal use only • New cement terminal for Auckland – high strategic importance; • Non-pipe products delivering growth for Rocla; • Rocla Quarries positioned well for a turnaround in NSW infrastructure opportunities; • Recycling opportunities unde
Slide 17: Quarry End Use
Strategic focus: Quarry End Use For personal use only Long-term value creation • Five opportunities being explored Three Kings • Residential zoning sought • 2014 start – post filling • $200m in revenue (2007 dollars / present values) Pokeno • 16 Ha. land for industrial zoning • Quarry zone intact •
Slide 18: Outlook for Infrastructure: FY 2008 / 2009
Outlook for Infrastructure: FY 2008 / 2009 For personal use only Construction full order book Housing down Product Volumes flat Margins some areas of weakness Growing Infrastructure Infrastructure
Slide 19: Outlook for Infrastructure: Longer term
Outlook for Infrastructure: Longer term For personal use only Growing Infrastructure Infrastructure
Slide 20: Questions
For personal use only Questions Growing Infrastructure Infrastructure