Slide 1: Full Year Results to 30 June 2024
Fletcher Building Full Year Results to 30 June 2024 21 August 2024 Fletcher Building Limited
Slide 2: Important Information
Important Information This presentation has been prepared by Fletcher Building Limited and its group of companies (“Fletcher Building”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This presentation provides addi
Slide 3: Agenda
Agenda 1. Results Overview Nick Traber 2. Financial Results Bevan McKenzie 3. Outlook Nick Traber Fletcher Building Limited
Slide 4: FY24 summary
FY24 summary Costs & cash well-controlled; earnings impacted by weak market & significant items FY24 performance Revenues flat overall but tough trading conditions vs. FY23, Materials & Distribution sector activity levels materially lower Group continuing operations EBIT $509m; within guidance
Slide 5: Progress and near-term priorities
Progress and near-term priorities Strong focus on what matters: People, Customers, Cost and Cash, plus closing out legacy issues Delivery so far Priorities going forward New leadership team members appointed with strong Ongoing cost reduction to reflect weaker operating industry experience & per
Slide 6: FY24 results (continuing operations) at a glance
FY24 results (continuing operations) at a glance Revenue mix change YoY and lower EBIT from market volume decline; strong unit sales in Fletcher Residential Revenue1 ($b) EBIT2 ($m) FY24 trading 785 7.7 7.7 679 Group revenue flat YOY, with higher revenues in Resi & Devt and 6.6 Construction, offse
Slide 7: FY24 results at a glance
FY24 results at a glance Robust trading cash flow outside of FCC legacy projects, reflecting tight control of working capital; reduced capex Trading Cash from continuing Group Trading Cash ($m) ops, excl. legacy & sig items ($m) FY24 trading 475 784 Group trading cash impacted by Construction lega
Slide 8: FY24 results at a glance
FY24 results at a glance Earnings impacted by market activity, legacy provisions and write-downs on Higgins and Tradelink Net Earnings before sig items from Net Earnings after sig items & continuing ops ($m) discontinued ops ($m) FY24 trading 235 Net Loss of $227m impacted by $180m legacy provisio
Slide 9: Balanced Scorecard
Balanced Scorecard Continuing to drive a strong safety culture & risk controls; good progress on lowering our carbon emissions Safety Sustainability Total Recordable Injury 89% (695) of sites injury free Carbon (CO2) Emissions & 19% lower carbon since FY18; Frequency Rate1 in FY24; 3 businesses
Slide 10: Balanced Scorecard
Balanced Scorecard Customer NPS and people engagement continue to trend positively Customer Engagement Net Promoter Score1 Strong FY24 NPS of 48, uplift Employee Engagement Rating Continued improvement, on of 6pt from FY23; on track to track to our target eNPS > 40 our target NPS ≥ 55 (global up
Slide 11: Divisional Performance
Divisional Performance Strong cost focus to respond to market volume decline, especially in Materials & Distribution Division EBIT1 EBIT1 Margin FY24 trading highlights Building Building Products, Distribution and Concrete materially softer $143m 10.6% volumes esp. in Resi sector from developers &
Slide 12: Residential & Development
Residential & Development We are exploring capital partnership options for the Residential & Development division The Residential and Development division has performed strongly through the cycle, generating EBIT margins & ROFEs >15% The business has acquired land effectively, controls a pipelin
Slide 13: Status update on WA plumbing
Status update on WA plumbing Remain focused on reaching a pragmatic industry response Industry Response in WA We remain focused on reaching a pragmatic industry response to the plumbing matters in WA. Constructive negotiations continue and Iplex is intent on trying to reach an agreement in princ
Slide 14: Agenda
Agenda 1. Results Overview Nick Traber 2. Financial Results Bevan McKenzie 3. Outlook Nick Traber Fletcher Building Limited
Slide 15: Income Statement
Income Statement Net earnings impacted by market activity, legacy Construction one-offs & loss from discontinued Tradelink Income statement Jun 2023 Jun 2024 NZ$m 12 months 12 months Var FY24 income statement Revenue 7,679 7,683 0% EBIT1 decline reflects softer operating environment across NZ & AU
Slide 16: FY23 to FY24 EBIT bridge
FY23 to FY24 EBIT bridge Lower market volumes in M&D divisions drove earnings decline; overhead cost reduction > inflation EBIT1: FY23 to FY24 (NZ$m) 785 (220) (20) 32 (16) (29) (91) 111 (16) (27) 509 M&D Market Volumes2 NZ: 25% Including: AU: 15% - Headcount reduction - Footprint rationalisation -
Slide 17: Cash flow
Cash flow Trading cash flow (ex sig items & legacy) of $784m, materially improved vs. FY23; legacy cash impact significant Cash flow Jun 2023 Jun 2024 NZ$m 12 months 12 months FY24 cash flows EBIT before significant items from continuing operations 785 509 Trading cash flow (continuing ops, ex leg
Slide 18: Working Capital
Working Capital Significant improvement vs. prior period through strong focus on receivables and inventory management Cash flow working capital movements Jun 2023 Jun 2024 NZ$m 12 months 12 months FY24 working capital Materials & Distribution Divisions (continuing operations) Materials & distribut
Slide 19: Construction legacy projects
Construction legacy projects No change to provisions from HY24; material cash outflow in FY24 principally on NZICC Actual & Forecast FCC Legacy Project Cash Flows ($m) NZICC cash outflows of $307m; lower than expected due to all Contracts Works Insurance settled & revenue received in FY24. Current
Slide 20: Capex
Capex FY24 capex reduced from original guidance, responding to market environment Capex and Investments Cash Flows1 Jun 2023 Jun 2024 NZ$m 12 months 12 months Base capex 221 218 FY24 capex envelope significantly reduced throughout course of Above Base: growth capex 128 136 the year Above Base: inv
Slide 21: FY23 to FY24 net debt bridge
FY23 to FY24 net debt bridge Increased debt levels due to legacy outflows and investments, partly offset by good trading cash Net Debt: Jun 23 to Jun 24 (NZ$m) 124 46 613 416 15 134 28 1,766 376 1,412 74 67 31 Net Debt M&D and Resi & Dev't FCC FCC legacy Funding Net Tax paid FY23 Final Other 1 Tradi
Slide 22: Leverage
Leverage At top end of range as expected due to legacy cash flow, growth capex and cycle; banking agreements provide additional covenant headroom from Jun-24 to Dec-25 (inclusive) if required Leverage1 (Net Debt / Senior Leverage (Snr Net Total Interest Cover (pre- Senior Interest Cover (pre- EBITDA
Slide 23: Funding
Funding Group is well-funded with solid maturity profile and strong liquidity of $1.1b Debt facilities and drawings Facilities Drawings Debt maturity profile ($m) NZ$m 30 Jun 24 30 Jun 24 Bank Loans 2,062 1,302 1,104 1,064 USPP 458 458 Capital Notes 297 297 Other 20 20 Total 2,837 2,077 725 1,064
Slide 24: Outlook on Balance Sheet and Cash Flow
Outlook on Balance Sheet and Cash Flow Continued measures taken to improve balance sheet settings Capex: expected to be c.$325m in FY25 vs. prior guidance of c.$350m. Growth capex c.$170m on critical in-flight projects (Laminex wood panels, PlaceMakers Frame & Truss). Base capex c.$155m, below his
Slide 25: Agenda
Agenda 1. Results Overview Nick Traber 2. Financial Results Bevan McKenzie 3. Outlook Nick Traber Fletcher Building Limited
Slide 26: FY25 Outlook and priorities
FY25 Outlook and priorities Expect FY25 market conditions to remain challenging, strong focus on cost, cash & balance sheet Outlook Expect the year ahead to remain challenging with macro-economic pressures likely to persist through the year Planning for FY25 market volumes in our NZ & AU materia
Slide 27: Appendix
Appendix Fletcher Building Limited
Slide 28: FY24 Results: Building Products
FY24 Results: Building Products Gross Revenue ($m) EBIT ($m)1 FY24 trading performance Revenue 7% lower YoY driven by lower resi market (48% exposed) 1,443 1,345 215 & commercial sector (33% exposed) activity & intense market 143 competition. WWB & Laminex® share gains Pricing solid & cost disci
Slide 29: FY24 Results: Distribution
FY24 Results: Distribution Gross Revenue ($m) EBIT ($m)1 FY24 trading performance 1,824 141 Revenue 11% lower YoY, sharp market volume decline & aggressive 1,615 competition, with division c.80% exposed to resi sector. PlaceMakers share position stabilised in 2H24 but price concessions, esp in Fra
Slide 30: FY24 Results: Concrete
FY24 Results: Concrete Gross Revenue ($m) EBIT ($m)1 FY24 trading performance Revenue in line with FY23: pricing & market share growth offset 1,085 1,082 156 130 lower market activity; continued strategic shift to comm & infra with Firth® share gains, Winstone Aggregates® revenue up 18% incl. The
Slide 31: FY24 Results: Australia (continuing operations)
FY24 Results: Australia (continuing operations) Gross Revenue ($m) EBIT ($m)1 FY24 trading performance 2,222 Revenue 11% lower, slightly better than 15% decline in market 167 1,979 activity vs 1H23, finishing trades softened in 2H24 impacting 126 Laminex® & Fletcher Insulation® and lower civil pro
Slide 32: FY24 Results: Residential and Development
FY24 Results: Residential and Development Gross Revenue ($m) EBIT ($m)1 FY24 trading performance 796 147 Revenue up 31% from higher unit sales: 886 unit sales incl. 92 607 35 100 apartments & 17 Vivid Living® (vs. 617 unit sales incl. 42 apartments 6 in FY23). Strong performance enabled by offer t
Slide 33: FY24 Results: Construction
FY24 Results: Construction Gross Revenue ($m)1 EBIT ($m)1,2 FY24 trading performance 1,614 Revenue up $289m vs FY23: Eastern Busway Alliance and higher 32 1,325 28 volumes in Higgins® following weather events (Transport Rebuild East Coast (TREC) alliance rebuild work) & BPC significant water, airp
Slide 34: Divisional revenue exposure and FB revenue by market
Divisional revenue exposure and FB revenue by market Divisional Revenue Exposure by Sector Total FB Revenue by Market (%) AU Building Resi, 48% Com, 33% Infra, 19% AU Infrastructure Products Commercial NZ Residential 7% 3% Distribution Resi, 78% Com, 22% AU Residential 15% 36% Concrete Resi, 39% Com
Slide 35: Group and Australia restatements due to Tradelink divestment
Group and Australia restatements due to Tradelink divestment Reported Restated Reported Reported Reported Reported Restated Restated Restated Restated Group incl. Tradelink (NZD) FY22 1H23 FY23 1H24 Group excl. Tradelink (Continuing Operations) (NZD) FY22 1H23 FY23 1H24 Gross revenue 9,348 4,695 9,3