Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (October 2005)
24 slides from Fletcher Building's investor presentation, October 2005
Slide 1: Infrastructure Division
Infrastructure Division Mark Binns Sydney 2005 Photograph: Central Motorway Junction Stage 1, Auckland Growing Infrastructure
Slide 2: Cautionary Statement
Cautionary Statement 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 could differ materiall
Slide 3: Building on a solid core: FY04 – FY05 comparison
Building on a solid core: FY04 – FY05 comparison CONCRETE & AGGREGATE CEMENT PRODUCTS CONSTRUCTION Revenue +15% Revenue + 17% Revenue +14% Revenue +14% EBIT +60% EBIT +24% EBIT +35% EBIT +24% Market 40% Market 53% Market 30% Homes 318 share share share sold (Auckland) (RMC) Note: Excluding Rocla Gro
Slide 4: Continuing strong financial performance
Continuing strong financial performance Growing Infrastructure
Slide 5: NZ Construction market forecast
NZ Construction market forecast Growing Infrastructure
Slide 6: FBL Construction materials volumes
FBL Construction materials volumes NZ - Sales Volumes (000’s) 2001 2002 2003 2004 2005 Concrete m3 828 863 930 999 1063 Aggregates m3 3681 3834 4109 3984 4285 Concrete Pipe Tonnes 73 74 83 82 88 Pipeline Precast Tonnes 34 35 36 33 32 Source: Fletcher Building business units Growing Infrastructure
Slide 7: Infrastructure: a positive environment
Infrastructure: a positive environment Source: Fletcher Construction backlog and marketing prospects Growing Infrastructure
Slide 8: Infrastructure: materials pull-through
Infrastructure: materials pull-through Indicative materials used on a major Auckland roading project Growing Infrastructure
Slide 9: Infrastructure: major projects in progress
Infrastructure: major projects in progress Auckland University Business School Tauranga Hospital Central Motorway Junction $600m+ Northern Busway Pohokura gas treatment plant Auckland University Business School Source: Fletcher Construction Growing Infrastructure
Slide 10: Strategic focus: maximising margin - Cement
Strategic focus: maximising margin Cement • Price increases restrained by import parity. • Distribution costs reduced with introduction of barge. • Manufacturing cost benefits have started - and will maximise in FY2007. Source: Golden Bay Cement Growing Infrastructure
Slide 11: Strategic focus: maximising margin - Aggregates
Strategic focus: maximising margin Aggregates • Prices increased on manufactured product. • Operational improvements are keeping costs down. Source: Winstone Aggregates Growing Infrastructure
Slide 12: Strategic focus: maximising margin - Ready mix concrete
Strategic focus: maximising margin Ready mix concrete • Price leadership. • Increased material and distribution costs have successfully been passed on. Source: Firth Growing Infrastructure
Slide 13: Strategic focus: maximising margin - Concrete pipe
Strategic focus: maximising margin Concrete pipe • Strategic pricing focus. • Funds reduced through improved planning. • EBIT doubled last year. Source: Humes Pipeline Systems Growing Infrastructure
Slide 14: Strategic focus: minimising costs
Strategic focus: minimising costs Concrete operations • Large cost-out in FY2002. • Subsequent increases below inflation. • Limited pressure on overhead going forward. Source: Infrastructure Div management reports Note: Excludes Rocla Growing Infrastructure
Slide 15: Positioning for organic growth: Golden Bay Portland site
Strategic focus: positioning for organic growth Golden Bay. Portland site • Cement production capacity → 840 KT pa • Milling capacity → 940 KT pa • Investment of $90m • Benefits – up to $25m pa EBITDA. • Completion June 2006 Growing Infrastructure
Slide 16: Positioning for organic growth
Strategic focus: positioning for organic growth Source: Golden Bay Cement Growing Infrastructure
Slide 17: Positioning for organic growth: aggregates quarries
Strategic focus: positioning for organic growth Whangaripo Kaipara Hunua • Projected opening Oct. 2006 • Increased sand • Volumes up 60% volumes being over 3 years. • Capacity: 450k tpa consented • Symonds Hill • JV with Fulton Hogan consenting process underway Growing Infrastructure
Slide 18: Positioning for organic growth: Plastic Pipe
Strategic focus: positioning for organic growth Plastic Pipe • The plastic pipe market is dominated by two large manufacturers. Bosspipe – • We need to participate in joint venture with Hynds this sector of the pipe market. • JV formed March 2005 Growing Infrastructure
Slide 19: Core construction competency
Strategic focus: core construction competency People & plant • CAPEX 05 06 forecast $12m $16m • Employee growth [Engineering division] 419 519 Source: Fletcher Construction Growing Infrastructure
Slide 20: Strategic focus: secure key land assets
Strategic focus: secure key land assets Jacks Point – Queenstown LAQ – Auckland 200 sections. 800 sections. Supply period Feb 06- 2010 Supply period Jan 07-2011 (+ option on balance of resid. lots) Total residential land-bank: 1965 lots – with 318 sold in FY05 Growing Infrastructure
Slide 21: External growth – Rocla pipes
Strategic focus: external growth – Rocla pipes • Revenues 05 $A170m • Sales (tonnes) • Pipe / drainage 376k • Poles 30k • Sleepers 40k • Concrete pipe Australian market share 35% • Strong management • EVA positive • Market conditions exceed expectations. Source: Rocla Pipeline Systems Growing Infras
Slide 22: External growth – Rocla quarries
Strategic focus: external growth – Rocla quarries • Revenues 05 $A56m • 15 quarries • Market shares • Sydney 25% Kurnell plant, NSW • Melbourne 5% • Adelaide 40% • Perth 80% [Source: Rocla Quarry Products] • Strong management • EVA positive • Positive growth options. Bate Bay Growing Infrastructure
Slide 23: Outlook for Infrastructure Division FY06 – FY08
Outlook for Infrastructure Division FY06 – FY08 Volumes robust Margins further improvement Overheads contained Return on Funds growing Growing Infrastructure
Slide 24: Questions
Questions Growing Infrastructure
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