Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (November 2006)
30 slides from Fletcher Building's shareholder meeting presentation, Nov 14, 2006
Slide 1: Annual Shareholders' Meeting 14 November 2006
Annual Shareholders’ Meeting 14 November 2006
Slide 2: Dr Roderick Deane, Chairman
Dr Roderick Deane Chairman <- FletcherBuilding
Slide 3: Directors
Directors • Dr Roderick Deane (Chairman) • Paul Baines • Hugh Fletcher • Jonathan Ling (Managing Director) • Geoffrey McGrath • Sir Dryden Spring • Kerrin Vautier • Ralph Waters
Slide 4: Meeting agenda
Meeting agenda • Chairman’s address • Chief Executive’s address • Trading outlook • Shareholder questions and discussion • Consideration of, and voting on, the resolutions of the meeting
Slide 5: Financial results
Financial results • Net earnings up 9% to $379 million with diversification giving earnings resilience in softer market conditions • Earnings per share increased to 81.3 cents • Dividends for the year increased by 25% to 40 cents per share • Conservative financial gearing • Total shareholder return
Slide 6: Annual share price movement
Annual share price movement 154.00 152.00. 150.00. 148.00. 146.00. 144.00. 142.00. 140.00. 138.00. 136.00: 134.00, 132.00 130.00. 128.00. 126.00. 124.00 122.00. 120.00. 118.00. 116.00. 114.00 112.00. 110.00. 108.00. 106.00 104.00. 102.00. 100.00: 98.00 96.00 94.00. 92.00 90.00 88.00 86.00 [-=BASE1 F
Slide 7: Net earnings
Net earnings 379 $m 347* 240 168 93 2002 2003 2004 2005 2006 *Restated for IFRS
Slide 8: Dividends
Dividends 40 Cents per share 32 25 19 14 2002 2003 2004 2005 2006
Slide 9: Cumulative total shareholder returns
Cumulative total shareholder returns % Dividend 387 Share price 263 138 84 31 2002 2003 2004 2005 2006
Slide 10: Operating earnings
Operating earnings $m 675 612 460 331 210 2002 2003 2004 2005 2006
Slide 11: Earnings per share
Earnings per share Cents 81.3 77.6 55.7 43.4 27 2002 2003 2004 2005 2006
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Slide 13: Governance
Governance • Board actively involved • Good governance practices supplementing entrepreneurial focus • High levels of employee engagement • A key focus on health and safety
Slide 14: Jonathan Ling, Chief Executive and Managing Director
Jonathan Ling Chief Executive and Managing Director
Slide 15: Market conditions
Market conditions • Residential – softer overall, particularly in New Zealand, Victoria and New South Wales – affects Building Products, Laminates & Panels and particularly Distribution • Commercial building and infrastructure – strong overall in New Zealand and Australia – drives an increasing prop
Slide 16: Revenue
Revenue $m 5,520 4,636 3,958 3,221 2,966 2002 2003 2004 2005 2006
Slide 17: Operating cashflow
Operating cashflow $m 560 479 424 276 187 2002 2003 2004 2005 2006
Slide 18: Building Products
Building Products • Revenue up 29% to $1.7 billion • Operating earnings up 4% to $235 million • Softer market conditions • Stramit and Insulation Solutions acquired in March 2005 performing well against acquisition assumptions
Slide 19: Building Products
Building Products • Metal roof tiles exports impacted by unfavourable exchange rates and slow US market • Long steel products had lower earnings due to mill shutdown and import competition • Plasterboard had lower earnings reflecting softer residential markets in New Zealand • Insulation synergies b
Slide 20: Building Products' restructure
Building Products’ restructure • Will report as two divisions with effect from 1 July 2006 – Building Products – Steel • New chief executive Building Products appointed • International search underway for the chief executive of the Steel division
Slide 21: Infrastructure
Infrastructure • Revenue up 27% to $1.8 billion • Operating earnings up 30% to $255 million • Fifth consecutive year of revenue and earnings growth • Adjusting for impact of acquisition of Rocla business in 2005, earnings still up by 15%
Slide 22: Infrastructure
Infrastructure • Seventh year of record cement shipments • Continued demand, and earnings growth, in aggregates • Small increase in readymix volumes • New Zealand pipe market remains strong • Rocla Quarry products affected by softer Sydney market • Strong earnings growth for Rocla Pipeline products
Slide 23: Distribution
Distribution • Revenue up 4% to $956 million • Operating earnings down 7% to $75 million • Overall sales activity consistent with 2005 year • Significant increase in retail competition • Higher operating costs – refurbishments – new openings • Continued branch development programme including acquisi
Slide 24: Laminates & Panels
Laminates & Panels • Revenue up 8% to $1 billion • Operating earnings up 8% to $116 million • Generally difficult market conditions with lower housing activity and only some regions of the commercial sector strong • Marketing and new product initiatives – Green First Range, Diamond Gloss laminate, F
Slide 25: Strategic direction
Strategic direction A collection of businesses with strong strategic links Laminates Building Other Steel & Concrete Products Manufacturers Panels Dedicated Shared Other Construction Distribution Distribution Distribution Markets
Slide 26: The strategies that have driven growth
The strategies that have driven growth • Improve earnings reliability – expansion into Australia • Maintain and improve internal capabilities – increase capacity and efficiency – develop new products – further investment within the business • External growth – further expansion within and outside Au
Slide 27: Investing in our future
Investing in our future • New investments in the business – Dardanup (WA) particleboard upgrade – restore MDF capacity after Taupo fire • Build on the performance-orientated culture • Develop management capability • Position to be able to take advantage of growth options available
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Slide 29: Outlook
Outlook • Satisfactory performance expected for 2007 year • Commercial building and infrastructure to offset housing markets • Earnings for first four months of this year are slightly ahead of last year • Comfortable with market consensus forecast for the year
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