Slide 1: Annual Results to 30 June 2014
For personal use only Annual Results to 30 June 2014 Mark Adamson -Chief Executive Officer Nick Olson -Chief Financial Officer 20 August 2014
Slide 2: Disclaimer
Disclaimer For personal use only This Annual Results presentation dated 20 August 2014 provides additional comment on the management commentary of the same date. As such, it should be read in conjunction with, and subject to, the explanations and views of future outlook on market conditions, earning
Slide 3: Agenda
Agenda For personal use only Results Overview Geographic & Sectoral Analysis Divisional Performances Financial Results Business Transformation Programme Outlook Appendix 3 Fletcher Building Annual Results Presentation | © August 2014
Slide 4: Results Overview
Results Overview For personal use only Dimond, Rainbows End Auckland
Slide 5: Results Overview: Snapshot
Results Overview Snapshot For personal use only $8,401 REVENUES down 1% million $ million NET EARNINGS up 4% 36c DIVIDEND PER SHARE up 6% $ OPERATING EARNINGS up 4% million 49.3c EARNINGS PER SHARE up 4% 5 Fletcher Building Annual Results Presentation | © August 2014
Slide 6: Results Summary
Results Summary 4% increase in reported net earnings For personal use only Reported June 2013 June 2014 NZ$m 12 months 12 months %∆ Sales 8,517 8,401 -1 EBITDA 789 795 +1 EBIT 569 592 +4 Net earnings 326 339 +4 EPS - cps 47.6 49.3 +4 Dividend - cps 34.0 36.0 +6 6 Fletcher Building Annual Results Pre
Slide 7: Results Overview: Revenue
Results Overview Revenue For personal use only • Reported revenue $116m lower than FY13 $8,401 million • $428m of decline was due to adverse currency movements REVENUES down 1% • Underlying revenue growth of 4% Revenue growth rates Geographic segments in local currency New Zealand +5% Australia +2%
Slide 8: Results Overview: Operating Earnings
Results Overview Operating Earnings For personal use only • Reported operating earnings (EBIT) up 4% $592 OPERATING EARNINGS up 4% million Significant items Significant items relate to divestment of businesses Pacific Steel $19m Hudson Building Supplies $12m Fiji Concrete $1m Total $32m $624 • Opera
Slide 9: Results Overview: Net earnings
Results Overview Net earnings For personal use only • Reported net earnings up 4% to $339 $339m • Result includes net $16m of million restructuring and other costs (FY13: $4m net gain) NET EARNINGS up 4% • Net earnings before significant $362 items were up 11% to $362m million Earnings per share Ear
Slide 10: Results Overview: Dividend & Cashflow
Results Overview Dividend & Cashflow For personal use only • Cash flow from operations $489m a reduction of $70m from FY13 $489 ($559m) • Reduction is due to increased million residential land purchases, CASHFLOW FROM OPERATIONS down 13% increased inventory in emerging markets, and timing of constru
Slide 11: Revenue and EBIT bridges
For personal use only June 2013 Reported 8517 Foreign Currency Translations (428) Revenue NZ$m June 2013 Adjusted 8089 Underlying Growth 312 Growth + 4% 11 Fletcher Building Annual Results Presentation | © August 2014 June 2014 Reported Underlying Revenue 8401 4% and 15% respectively June 2013 Repor
Slide 12: Geographic & Sectoral Analysis
Geographic & Sectoral Analysis For personal use only Winstone Wallboards, Opawa, Christchurch 12
Slide 13: Sectoral exposure
Sectoral exposure Exposures based on revenues For personal use only Geographical Residential Commercial Infrastructure Other Exposure by Sector¹ (New/A&A)* New Zealand 47% 29% 18% 6% Australia 45% 25% 11% 19% Rest of World 47% 48% 0% 5% Total Manufacturing 46% 31% 11% 12% New Zealand 87% 13% 0% 0% A
Slide 14: Geographic earnings mix reflects economic performance of key markets
Geographic earnings mix reflects economic performance of key markets For personal use only • Revenue EBIT¹ (12 months to June 2014) (12 months to June 2014) 13% 15% 48% 27% 58% 39% New Zealand Australia Rest of World New Zealand Australia Rest of World 1. Before significant items 14 Fletcher Buildin
Slide 15: New Zealand operating earnings up strongly, Australia improved in second half
New Zealand operating earnings up strongly, Australia improved in second half of FY14 For personal use only EBIT¹ NZ$m Australian EBIT¹ 362 AU$m 286 83 86 80 68 203 171 91 80 1H 2H 1H 2H 2013 2014 New Zealand Australia Rest of the World 12 months to June 13 12 months to June 14 1. Before significant
Slide 16: New Zealand residential consents up 24%
New Zealand residential consents up 24% to highest level since 2007 For personal use only Total residential consents 12 month rolling – New Zealand 24,000 Change % year on year 23,000 50% Long run average (2001-2014) 22,000 40% 30% 21,000 20% 20,000 10% 0% 19,000 Christchurch Auckland NZ Rest of NZ
Slide 17: Australian residential consents up 21%
Australian residential consents up 21% multi-unit dwellings up strongly For personal use only Total residential consents 12 month rolling – Australia 110,000 200,000 180,000 100,000 160,000 140,000 90,000 120,000 80,000 100,000 80,000 70,000 60,000 40,000 60,000 20,000 50,000 0 Dec 13 Dec 12 Jun 14
Slide 18: Strong growth in NSW, QLD and WA
Strong growth in NSW, QLD and WA, multi-residential consents up 28% For personal use only Change in housing approvals – by state 12 months ended 30 June 2014 vs 2013 50% June 2013 June 2014 45% 12 mths 12 mths %∆ 40% Stand-alone 93,546 107,920 +15 35% Multi + other 66,695 85,266 +28 Residential 30%
Slide 19: Divisional Performances
Divisional Performances For personal use only Fletcher Construction, MacKays to Peka Peka Expressway
Slide 20: Divisional operating earnings overview
Divisional operating earnings overview For personal use only EBIT¹ NZ$m 222 229 135 122 120 124 105 87 51 42 17 8 Infrastructure Building Laminates & Distribution NZ Distribution Construction Products Products Panels Aus 12 months to June 13 12 months to June 14 1. Before significant items 20 Fletch
Slide 21: Infrastructure Products
Infrastructure Products Result For personal use only June 2013 June 2014 Cement, Concrete & Aggregates NZ$m 12 months 12 months %∆ New Zealand volumes up strongly: Sales 2,050 - Cement volumes up 24% 2,095 -2 - Aggregates volumes up 17% EBITDA¹ 312 316 +1 - Ready-mix volumes up 14% Australian aggreg
Slide 22: Building Products
Building Products Result For personal use only June 2013 June 2014 Plasterboard NZ$m 12 months 12 months %∆ Volumes up in line with house building Sales 1,350 1,288 -5 activity in New Zealand Insulation EBITDA 159 166 +4 Operating earnings declined due to EBIT 122 135 +11 price and margin compressio
Slide 23: Laminates & Panels
Laminates & Panels Result For personal use only June 2013 June 2014 Formica NZ$m 12 months 12 months %∆ Earnings up 9% at $63m Sales 1,738 1,710 -2 Revenue up 3% driven by volume growth in Asia and North America EBITDA 180 177 -2 Asia volumes up overall, and stable in EBIT Thailand Europe earnings u
Slide 24: Formica: volume growth in North America and Asia
Formica: volume growth in North America and Asia with European markets stabilising For personal use only June 2013 June 2014 EBIT NZ$m 12 months 12 months %∆ Asia 37 29 -22 North America 41 43 +5 Europe (5) 6 n/m Corporate (15) (15) - Total EBIT 58 63 +9 24 Fletcher Building Annual Results Presentat
Slide 25: Distribution New Zealand
Distribution New Zealand Result For personal use only June 2013 June 2014 PlaceMakers: NZ$m 12 months 12 months %∆ Revenues up 12% with ongoing improvement in trading conditions in Sales 1,147 1,169 +2 Auckland and Canterbury. EBITDA 54 64 +19 Operating earnings up 47% as volume increases and operat
Slide 26: Distribution Australia
Distribution Australia Result For personal use only June 2013 June 2014 Tradelink: NZ$m 12 months 12 months %∆ Increase in operating earnings to A$12m (2013: A$4m) in domestic Sales 994 927 -7 currency terms EBITDA¹ 17 25 +47 Market conditions improved Business improvement initiatives led to EBIT¹ 8
Slide 27: Construction
Construction Result For personal use only June 2013 June 2014 Increase in operating earnings due to NZ$m 12 months 12 months %∆ significant upturn in infrastructure business Sales 1,193 1,257 +5 Residential earnings slightly ahead of FY13 with continued strong sales levels at EBITDA 95 113 +19 Auckl
Slide 28: Canterbury update
Canterbury update For personal use only Canterbury Home Repair Programme: 59,000 permanent house repairs completed to date Programme to be substantially complete by December 2014 Insurance Council of New Zealand report that as at 30 June 2014: 80% of commercial claims settled ($7.7bn) 66% of
Slide 29: Health and safety performance continued improvement
Health and safety performance continued improvement For personal use only Total risk injury frequency rate* 14.01 11.07 8.48 6.80 6.00 2010 2011 2012 2013 2014 * Total injuries per million employee and contractor hours 29 Fletcher Building Annual Results Presentation | © August 2014
Slide 30: Financial Results
Financial Results For personal use only Stramit Building Products, Brisbane
Slide 31: Reported Results
Reported Results For personal use only Reported financial information NZ$m June 2013 June 2014 12 months 12 months %∆ Revenue 8,517 8,401 -1 EBITDA (before significant items) 789 827 +5 Depreciation / Amortisation 220 203 -8 EBIT (before significant items) 569 624 +10 Significant items (32) EBIT 569
Slide 32: Build up of earnings
Build up of earnings For personal use only Underlying NZ$ earnings by region (before significant items) June 2013 June 2014 NZ$m 12 months 12 months %∆ New Zealand 286 362 +27 Australia 203 171 -16 Rest of World 80 91 +14 Total NZ$m 569 624 +10 FX translation to FY14 rates (28) Earnings adjusted for
Slide 33: Operating cash flow
Operating cash flow For personal use only June 2013 June 2014 NZ$m 12 months 12 months Cashflow from operations before net working capital 525 579 movements Net working capital movements 34 (90) Net cash from operating activities 559 489 Full year net working capital movements June 2014 12 months Em
Slide 34: Net debt movement
For personal use only Opening net debt 1,789 NZ$m Cash from operations (pre working capital) (579) 62 Working capital Net Investment in 28 land translation impact Growth capex + 89 34 Fletcher Building Annual Results Presentation | © August 2014 acquisitions Stay in business 175 capex Divestments (3
Slide 35: Capital expenditure
Capital expenditure For personal use only 325 June 2013 June 2014 NZ$m 12 months 12 months %∆ 85 Stay-in-business 148 175 +18 85 275 220 Growth 85 85 - 203 Total Capex 233 260 +12 175 148 Acquisitions 13 4 -69 Depreciation 220 203 -8 2013 2014 2015 Stay in Business Depreciation Growth/Acquisitions 2
Slide 36: Key ratios
Key ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 37 34 33 32 51 27 24 14 9 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 -27 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Return on Average Funds Percentage¹ 13 13 12 11 10 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 1. Ear
Slide 37: Debt profile
Debt profile For personal use only Funding and Maturity Profile NZ$m Undrawn credit lines of $616m and cash of $134m. 252 Average maturity of debt is 4.2 years. 350 Approximately 60% of all borrowings have fixed interest rates. 14 412 Average interest rate on debt is 298 6.2%. 210 151 - 140 168 152
Slide 38: Capital management settings
Capital management settings For personal use only Fletcher Building will continue to target strong ‘BBB’ credit characteristics Gearing Target of Net Debt to Net Debt + Equity (including Capital Notes) of 30-40% As at 30 June 2014: 32% Leverage Target Net Debt to EBITDA of 2.0 to 2.5 times A
Slide 39: Business Transformation Programme
Business Transformation For personal use only Programme Golden Bay Cement, Auckland
Slide 40: Substantial progress in implementing FBUnite programme
Substantial progress in implementing FBUnite programme For personal use only Benefits of $25m delivered in FY14, partly offset by $10m increased operating costs and $12m capital expenditure Centralised procurement, property, financial shared services and IT functions established Operations exc
Slide 41: Outlook
Outlook For personal use only Fletcher Construction, Waterview Tunnel Auckland
Slide 42: Outlook FY15
Outlook FY15 For personal use only FY15 performance will be impacted by businesses sold in FY14, along with completion of Stonefields subdivision in Auckland and Canterbury Home Repair Programme Further cost savings from FBUnite will partly offset these earnings impacts FY14 EBIT from Continuing
Slide 43: Outlook FY15 by region
Outlook FY15 For personal use only New Zealand Strong activity levels in New Zealand expected to continue across residential, commercial and infrastructure Continued work in Canterbury around horizontal infrastructure repairs and new commercial building activity. Home repair programme to be subs
Slide 44: Annual Results to June 2014
For personal use only Annual Results to 30 June 2014 Mark Adamson -Chief Executive Officer Nick Olson -Chief Financial Officer 20 August 2014
Slide 45: Appendix: Building consent data
Appendix: Building consent data For personal use only June 2012 June 2013 June 2014 14/13 Building Consents 12 months 12 months 12 months % Mvmt New Zealand Residential Consents 15,414 18,783 23,260 +24 Non Res WPIP ($m) 4,452 5,028 5,168 +3 Infrastructure WPIP ($m) 6,402 7,314 7,055 -4 Australia So