Fletcher Building Limited · NZX:FBU
Fletcher Building — H1 2005 Earnings Presentation
36 slides from Fletcher Building's earnings presentation, Feb 9, 2005
Slide 1: Fletcher Building Limited Half Year Results 2005
Fletcher Building Limited Half Year Results 2005 9 February 2005 Ralph Waters 11 August 2004 Chief Executive Officer
Slide 2: Presentation notice
This Half Year Results presentation dated 9 February 2005 provides additional comment on the media release 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, earnings and activities given in that release.
Slide 3: Highlights
3 Highlights Strong Earnings Net profit up 45% on pcp to Growth $161 million Of this, $66 million + tax credits Increased Returns will be distributed to shareholders. To Shareholders TSR of 50% for the 6 month period Both Laminex and Tasman have Acquisitions well exceeded original earnings Outperfor
Slide 4: Summary of Results
4 Summary of Results Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Revenue 2171 1929 3958 EBITDA 349 274 582 EBITA 294 222 471 EBIT 288 216 460 Net Earnings 161 111 240 EPS (cents) 36.7 25.9 55.7 Dividend cps 15.0 11.0 25.0 Half Year Results – February 2005
Slide 5: Segmental EBIT
5 Segmental EBIT Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Building Products 121 74 164 Distribution 42 36 73 Infrastructure 77 62 136 Laminates & Panels 56 48 95 Corporate/Unallocated -8 -4 -8 EBIT 288 216 460 Half Year Results – February 2005
Slide 6: Building Products Results
6 Building Products Results Dec Dec*** Jun * 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Revenue 581 415 927 EBIT 121 74 164 Margin 20.8% 17.8% 17.7% Funds 587 571 560 Return on Funds (annualised) 41.2% 29.4% 31% ** * Includes 9 months of Tasman ** Proforma return based on full 12 months of Tasman *** I
Slide 7: Building Products
7 Building Products Record domestic volumes from strong markets in New Zealand Operational improvements across the board Winstone Wallboards Held market share circa 94% Growth in performance boards Fletcher Aluminium Improved margins and earnings Half Year Results – February 2005
Slide 8: Building Products
8 Building Products Insulation (NZ) Excellent result Furnace rebuilt over Christmas break Decra Roofing (USA) Strong sales growth Oven expansion underway AHI Roofing (NZ) Exports increasing Malaysian plant acquired Half Year Results – February 2005
Slide 9: Building Products
9 Building Products Insulation (Australia) Strong sales performance Capacity constrained Access Flooring Good contracts won Sinkware Exports strong and holding in the domestic market Half Year Results – February 2005
Slide 10: Building Products
10 Building Products Steel Manufacturing Margins held in period of fluctuating prices Strong demand Returns were above WACC Steel Processing & Distribution Very strong sales growth Earnings enhanced by improved margins Half Year Results – February 2005
Slide 11: Distribution Results
11 Distribution Results Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Gross Revenue 472 425 863 EBIT 42 36 73 Margin 8.9% 8.5% 8.5% Funds 112 102 106 Return on Funds (annualised) 75.0% 70.6% 68.9% Half Year Results – February 2005
Slide 12: Distribution
12 Distribution Revenues up 11% and earnings 17% on pcp Excellent margins and returns Riccarton totally rebuilt – largest trade store in New Zealand New stores replacing old/smaller stores in Lunn Avenue Auckland and Queenstown Half Year Results – February 2005
Slide 13: Infrastructure Results
13 Infrastructure Results Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Revenue 618 570 1161 EBIT 77 62 136 Margin 12.5% 10.9% 11.7% Funds 430 362 364 Return on Funds (annualised) 35.8% 34.3% 37.4% Half Year Results – February 2005
Slide 14: Infrastructure
14 Infrastructure Construction profit down $4 million on pcp but largely timing of profit recognition Contracts completed: Sky City Conference Centre Grafton Gully New major construction contracts: Pohukura ($90m) Northern Busway ($180m) Auckland Business School ($130m) Bidding:
Slide 15: Infrastructure
15 Infrastructure Record concrete volumes and earnings across the board Golden Bay Upgrade project commissioned at 2000 tpd Further upgrade due for completion by July Firth Readymix and masonry sales up in volume Margins held or improved across the business Half Year Results – February
Slide 16: Infrastructure
16 Infrastructure Winstone Aggregates Mix and selling price improved Whitehall quarry expansion Hunua quarry expansion Infrastructure underpins growth Humes Prices, margins and volumes all improved Land subdivision on the increase Expanding plastic pipe production Half Year Results
Slide 17: Infrastructure
17 Infrastructure Stresscrete Benefits from strong infrastructure market Margins and earnings improved Overseas Steady results from Fiji and Peru Half Year Results – February 2005
Slide 18: Laminates & Panels Results
18 Laminates & Panels Results Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths Revenue 499 511 994 EBIT 56 48 95 Margin 11.2% 9.4% 9.6% Funds 793 850 789 Return on Funds (annualised) 14.1% 11.3% 12.0% Half Year Results – February 2005
Slide 19: Laminates & Panels
19 Laminates & Panels Performance well ahead of the same period last year Solid performances in QLD and WA offsetting weaker performances in NSW and VIC The New Zealand market remained strong Australian warehouse consolidations improving logistics efficiencies Joint ventures in WA performe
Slide 20: Profit After Tax
20 Profit After Tax Dec Dec Jun 2004 2003 2004 $m 6 Mths 6 Mths 12 Mths EBIT 288 216 460 Interest -33 -36 -75 Tax -82 -58 -124 Minority Interests -12 -11 -21 Profit After Tax 161 111 240 Half Year Results – February 2005
Slide 21: Simplified Balance Sheet
21 Simplified Balance Sheet Dec Jun 2004 2004 NZ$m NZ$m Assets Current Assets 1182 1022 Fixed Assets 1048 1023 Intangibles & Goodwill 334 342 Provision for Deferred Taxation 83 86 Investments 163 159 Total Fletcher Building Assets 2810 2632 Liabilities Current Liabilities 810 666 Net Debt 374 448 Ca
Slide 22: Key Ratios: Total Shareholder Return
22 Key Ratios Total Shareholder Return (TSR)** 50% 50% 43% 40% 33% 30% 24% 20% 6% 10% 0% Jun 01* Jun 02 Jun 03 Jun 04 Dec 04 *** * June 01 is the return for the 3 months from separation date ** TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) *** For the six month
Slide 23: Key Ratios: Debt/Debt Plus Equity
23 Key Ratios Debt/Debt Plus Equity % 80 70 60 53.2 49.2 49.9 48.4 47.2 50 40.2 43.1 38.7 40 30 20 10 0 Jun Dec Jun Dec Jun Dec Jun Dec 01 01 02 02 03 03 04 04 Half Year Results – February 2005
Slide 24: Key Ratios: Return on Average Equity
24 Key Ratios Return on Average Equity* % 28.1 23.0 24.3 30 16.9 20 10 0 -10 -20 -30 -43.8 -40 -50 Jun 01 Jun 02 Jun 03 Jun 04 Dec 04 * Net earnings after capital notes interest/shareholders funds Half Year Results – February 2005
Slide 25: Key Ratios: Return on Average Funds
25 Key Ratios Return on Average Funds* % 35 30.3 30 24.4 24.7 23.1 25 20 15 10 5 0 -8.6 -5 -10 Jun 01 Jun 02 Jun 03 Jun 04 Dec 04 * EBIT/(Average net debt+equity+capital notes) - deferred tax asset Half Year Results – February 2005
Slide 26: Key Ratios: Interest Cover
26 Key Ratios Interest Cover* 12 10.6 8.8 10 7.6 7.8 7.3 8 5.8 (times) 6 4.6 3.1 4 2 0 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 * EBITDA pre unusuals/interest paid including capital note interest Half Year Results – February 2005
Slide 27: Net Term Debt Movement
NZ$ Millions 0 200 400 600 Opening Debt 448 Cash from ops (285) 61 Working capital Half Year Results – February 2005 Capex 100 Divestments (7) Dividends 42 Min Distn 19 Net Term Debt Movement Other (4) Closing debt 374 27
Slide 28: Operational & Strategic Update
Operational & Strategic Update Ralph Waters 11 August 2004 Chief Executive Officer
Slide 29: Strategic Agenda
29 Strategic Agenda Earnings Reliability Internal Growth External Growth Half Year Results – February 2005
Slide 30: Earnings Reliability
30 Earnings Reliability Our spread of activities has reduced earnings volatility Decline forecast in residential is not overwhelming Non-residential and infrastructure markets will still be strong in 2006 Continue to improve earnings other than through volume (e.g. Laminex) Half Year Results
Slide 31: New Zealand Value of Work Commenced
31 New Zealand Value of Work Commenced NZ$ million Forecast 16000 +9% +2% -3% 14000 +14% Infrastructure +9% +8% 12000 10000 +17% Non 8000 +8% +2% Residential 0% 6000 0% -2% A&A 4000 +2% -17% -3% Residential 2000 0 97 98 99 00 01 02 03 04 05 06 07 Source : Infometrics Half Year Results – February 200
Slide 32: Australia Value of Work Commenced
32 Australia Value of Work Commenced Forecast 60 50 6.9% - - 1.7% 6.1% 40 A$Billion 30 20 10 2005f 2006f 2007f 2001 2003 2004 2000 2002 1995 1999 1996 1997 1998 Dwelling (Incl A&A) Non-Dwelling Source : BIS Shrapnel Building in Australia December 2004 Update Half Year Results – February 2005
Slide 33: Internal Growth Opportunities
33 Internal Growth Opportunities Lifting capacity in a number of business units Cement R.M.C. Aggregates Roof Tiles Insulation Steel Particle Board & MDF Half Year Results – February 2005
Slide 34: External Growth Opportunities
34 External Growth Opportunities We have the financial capacity Amatek a possibility Should be resolved one way or other by end of February Other options but not short term Half Year Results – February 2005
Slide 35: Outlook
35 Outlook NZ and Australia residential markets will soften this year, but from record high levels Non–residential and infrastructure outlook is strong for next two to three years in New Zealand Full year outlook $525-545 million EBIT Half Year Results – February 2005
Slide 36: Ralph Waters, Chief Executive Officer
Ralph Waters 11 August 2004 Chief Executive Officer