Slide 1: Investor Presentation September 2012
INVESTOR For personal use only PRESENTATION September 2012 Bill Roest Chief Financial Officer Hunua Quarry, Auckland
Slide 2: Disclaimer
Investor Presentation | Fletcher Building | © September 2012 | Page 2 Disclaimer 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 stateme
Slide 3: Results Overview
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 3 Investor Presenation RESULTS OVERVIEW For personal use only ASB Wynyard Quarter, Auckland
Slide 4: Fletcher Building at a glance
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 4 Fletcher Building at a glance For personal use only • Revenue – year to 30 June 2012: NZ$8.8 billion • Market Capitalisation: NZ$4.3 billion • Employees: 20,000 • Shareholders: (as at 30 June 2012) Revenues: (as a
Slide 5: Fletcher Building – key listing information
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 5 Fletcher Building – key listing information For personal use only • Listed on the New Zealand and Australian stock exchanges New Zealand • Second largest listed company by market capitalisation on the NZX Australi
Slide 6: Market leading businesses
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 6 Market leading businesses For personal use only Building Laminates Concrete Construction Crane Distribution Steel Products & Panels Plasterboard Cement Construction Pipelines – Building The Laminex Coated Steel
Slide 7: Residential consents in NZ and US improved whilst Australia continued to slow
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 7 Residential consents in NZ and US improved whilst Australia continued to slow For personal use only June 2012 June 2011 June 2010 12/11 Building Consents 12 months 12 months 12 months %Mvmt New Zealand Residential
Slide 8: NZ housing consents – record low levels in first half of FY12
Investor Presentation | Fletcher Building | © September 2012 Results Overview | Page 8 NZ housing consents – record low levels in the first half of FY12, modest improvement in second half For personal use only Residential Consents 12 month moving average 16,000 14,000 12,000 Jun-09 Sep-09 Dec-09 Mar
Slide 9: Strategy
Investor Presentation | Fletcher Building | © September 2012 Strategy | Page 9 Investor Presentation STRATEGY For personal use only Horsham, Victoria
Slide 10: Strategy
Investor Presentation | Fletcher Building | © September 2012 Strategy | Page 10 Strategy For personal use only Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating mo
Slide 11: Fletcher Building has a vertically integrated value chain
Investor Presentation | Fletcher Building | © September 2012 Strategy | Page 11 Fletcher Building has a vertically integrated value chain For personal use only Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Di
Slide 12: Financial Results
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 12 Investor Presentation 2012 FINANCIAL For personal use only RESULTS Whangarei Golden Bay Cement, Portland
Slide 13: Weak NZ and Australian construction markets adversely impacted earnings
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 13 Weak NZ and Australian construction markets adversely impacted earnings For personal use only June 2012 June 2011 NZ$m 12 months 12 months % Change Sales 8,873 7,416 +20 EBITDA¹ 786 801 -2 EBIT¹ 556 596 -7
Slide 14: Strong full year contribution from Crane, earnings up in Concrete
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 14 Strong full year contribution from Crane, earnings up in Concrete, other divisions down on lower volumes and/or margins For personal use only EBIT NZ$million1 168 139 130 125 111 106 83 72 60 50 48 39 29 27
Slide 15: Operating earnings – 1st Half compared with 2nd Half
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 15 Operating earnings before restructuring and impairment charges – 1st Half compared with 2nd Half For personal use only 6 months June 2012 6 months Dec 2011 (2nd half) (1st half) NZ$M Revenue EBIT Revenue EB
Slide 16: Cashflow from operations up 11%
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 16 Cashflow from operations up 11% For personal use only June 2012 June 2011 12 months 12 months % Change EBITDA 633 697 -9 Funding costs (152) (122) +25 Cash tax paid (123) (86) +43 Non cash restructuring/imp
Slide 17: Key ratios
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 17 Key ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 42 40 24 35 34 14 14 31 27 22 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 -27 Jun-07 Jun-08 Jun-09 J
Slide 18: Budgeted capital expenditure to reduce in FY13
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 18 Budgeted capital expenditure to reduce in FY 13 For personal use only Capital Expenditure June 12 June 11 FY13 363 12 mths 12 mths % ∆ Budget 307 * Budget Stay-in-business 207 200 +4 162 96 56 264* 246* Gro
Slide 19: Debt maturity profile
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 19 Debt maturity profile For personal use only Funding and Maturity Profile • Undrawn credit lines of $782 million June 2012 and cash on hand of $168 million. 200 • Average maturity of debt is 5 years. 30 352
Slide 20: Canterbury update
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 20 Canterbury update For personal use only • Residential repairs for Earthquake Commission: • 21 hubs established to carry out repairs • Over 20,000 home repairs completed to date • In addition, 45,000 emergen
Slide 21: Restructuring and impairment charges
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 21 Restructuring and impairment charges For personal use only Year to 30 June 2012 Restructuring and impairments charges NZ$ Million Before tax Tax After tax Laminex restructuring – Australia and New Zealand 5
Slide 22: Strong contribution from Crane in first full year of ownership
Investor Presentation | Fletcher Building | © September 2012 2012 Financial Results | Page 22 Strong contribution from Crane in first full year of ownership For personal use only • Operating earnings $106 million, up 15% on 2011 result • Pipelines: • Operating earnings up 28% to $59 million • Gross
Slide 23: Outlook
Investor Presentation | Fletcher Building | © September 2012 Outlook | Page 23 Investor Presentation For personal use only OUTLOOK Formica, Topshop London
Slide 24: Outlook FY2013
Investor Presentation | Fletcher Building | © September 2012 Outlook | Page 24 Outlook FY2013 For personal use only New Zealand: • Continued modest improvement in new house building − Assisted by low interest rates and increased activity in Canterbury • Commercial and infrastructure activity not exp
Slide 25: Appendix
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 25 Investor Presentation APPENDIX For personal use only Crane Copper Tube, Adelaide
Slide 26: Building Products
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 26 Building Products For personal use only Division Overview Business Description The Building Products division manufactures a broad Fletcher Insulation in Australia manufactures a range of building products. The divisions
Slide 27: Building Products result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 27 Building Products result For personal use only June 12 June 11 Plasterboard operating earnings NZ$m 12 Mths 12 Mths %∆ down 10% due to lower volumes. Sales 670 692 -3 EBITDA¹ 97 138 -30 Insulation continued industry over
Slide 28: Concrete
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 28 Concrete For personal use only Division Overview Business Description The Concrete division consists of a vertically integrated NZ’s leading national concrete company supplying Firth concrete business in New Zealand and
Slide 29: Concrete result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 29 Concrete result For personal use only June 12 June 11 NZ Concrete NZ$m 12 mths 12 mths %∆ • Revenues 3% higher with most product Sales 958 912 +5 volumes similar or slightly up on prior year; EBITDA Concrete NZ 101 102 -
Slide 30: Construction
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 30 Construction For personal use only Division Overview Business Description The Construction division comprises one of New A leading general constructor of commercial, retail, Zealand’s largest general construction contrac
Slide 31: Construction result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 31 Construction result For personal use only June 12 June 11 Tighter construction margins in NZ$m 12 mths 12 mths %∆ subdued market Sales 1,040 1,140 -9 Construction backlog increased to EBITDA 61 70 -13 $1,094m at end of J
Slide 32: Crane
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 32 Crane For personal use only Division Overview Business Description Crane is the Australian leader in the manufacturing and A leading manufacturer and supplier of plastic distribution of plastic pipelines systems, plumbin
Slide 33: Crane – full year earnings overview
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 33 Crane – full year earnings overview For personal use only FY12 FY11 FY12 FY11 Sales Sales EBIT EBIT² NZ$M NZ$M¹ NZ$M NZ$M¹ %∆ Pipelines 791 674 59 46 +28 Tradelink 1,123 1,205 38 55 -31 Trade Distribution - NZ 363 371 (1
Slide 34: Distribution
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 34 Distribution For personal use only Division Overview Business Description The Distribution division consists of the PlaceMakers Is a nationwide supplier of building materials to business in New Zealand and supplies build
Slide 35: Distribution result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 35 Distribution result For personal use only June 12 June 11 • Revenues down 5%, impacted by NZ$m 12 Mths 12 Mths %∆ continued low levels of residential Sales 813 856 -5 house building EBITDA 35 48 -27 • Increased competito
Slide 36: Laminates & Panels
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 36 Laminates & Panels For personal use only Division Overview Business Description The Laminates & Panels division comprises of the Is the leading Australian and New Zealand Australasian based woodpanels manufacturer and ma
Slide 37: Laminates & Panels result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 37 Laminates & Panels result For personal use only June 12 June 11 NZ$m 12 mths 12 mths %∆ Laminex • Australian revenues down 9% due to Sales 1,849 1,979 -7 slowdown in residential and EBITDA¹ commercial markets Laminex¹ 10
Slide 38: Formica: strong growth in operating earnings
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 38 Formica: strong growth in operating earnings before restructuring and impairment charges, driven by Asia and North America For personal use only EBIT NZ$m FY12 FY11 % Change Asia 38 34 +12 North America 34 28 +21 Europe¹
Slide 39: Steel
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 39 Steel For personal use only Division Overview Business Description The Steel division operates a diversified portfolio of • Stramit Building Products: a leading Australian steel businesses across three business lines, pr
Slide 40: Steel result
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 40 Steel result For personal use only June 12 June 11 • Lower rollforming volumes in NZ$m 12 Mths 12 mths %∆ Australia, margins impacted by Sales 1,150 1,214 -5 increased competition EBITDA 73 106 -31 • Long steel margins i
Slide 41: Bill Roest, Chief Financial Officer
Investor Presentation | Fletcher Building | © September 2012 Appendix | Page 41 INVESTOR For personal use only PRESENTATION September 2012 Bill Roest Chief Financial Officer Hunua Quarry, Auckland