Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (September 2004)
34 slides from Fletcher Building's investor presentation, September 2004
Slide 1: Analysts Briefing September 2004
Analysts Briefing September 2004 Mark Binns Chief Executive, Concrete
Slide 2: Concrete Division
<- FletcherBuilding ‘ Firth = 3 Re Golden Bay Cement bony re stresscrete 50) 7 G, 5 No.1 Rock Group
Slide 3: Current Concrete Industry Structure
Current Concrete Industry Structure Golden Bay 52% Cement Holcim NZ 48% Win Aggs Aggregates 25% Aggregate <5% Firth Humes 30% Stresscrete Concrete Holcim/Allied 35% Construction Users Figures are estimates of NZ market shares of the business.
Slide 4: Performance since FY2001
Performance since FY2001 Concrete Group EBIT FY2001 versus FY2004 Increased: revenues, cash margins 100.0 EBIT 90.0 ROF 80.0 every year since FY2001 NZ$ Millions 70.0 All NZ businesses exceeded 60.0 budget in FY2004. 50.0 Golden Bay’s results hit by 40.0 capacity constraints in 30.0 manufactur
Slide 5: Golden Bay Cement
Golden Bay Cement Maintained 52% market share Achieved price increase Running at full capacity Needed to import 180K tonnes of clinker Transported 175K tonnes of cement by road Implemented capital upgrade at working plant
Slide 6: Firth
Firth Milestone volume achieved in FY2004. 1,000,000 m³ of Ready Mixed Concrete. Market exposure 60% commercial and infrastructure 40% residential Assessed share Holcim/Associates 35% Firth 30% Tonnes Group 8% Stevensons 5% Other 22%
Slide 7: Winstone Aggregates
Winstone Aggregates Strong Auckland position – 30% market share 80% of EBIT from north of Bombay Hills Spread: 17 sites/plants Security: 40% of sales to Firth Process improvements: more to come!
Slide 8: Humes
Humes Price: Price leadership lifted average concrete pipe price by 12% on FY03 Market share: Reduced market share in some areas (due to higher price). Plastic comprised 26% of FY04 sales.
Slide 9: Stresscrete
Stresscrete A broad solutions approach v product focus. EBIT doubled due to operational improvements. Backlog = 50% of budgeted turnover New products developed
Slide 10: Outlook
Outlook VALUE OF WORK DONE New Zealand value of work done Forecast NZ$ million 14000 +5% +17% -5% 12000 +10% +10% Infra- +18% ? structure 10000 8000 +10% +14% Non Non- +22% +8% Residential Residential 6000 +5% A&A -7% A&A 4000 +25% -3% Residential 2000 -24% Residential 0 97 98 99 00 01 02 03 04 05 0
Slide 11: Strategic issues overview
Strategic issues overview Meeting increased cement demand Growing overall concrete demand and share Positioning for growth in the Auckland aggregate markets Concrete pipe market-share; positioning in plastics Growing pre-stress / pre-cast business in Auckland
Slide 12: Satisfying cement demand
Satisfying cement demand NZ Cement Demand 1,600,000 1,400,000 1,200,000 1,000,000 Tonnes 800,000 2001 Forecast 600,000 400,000 200,000 - 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Years Source: Golden Bay Cement estimates Forecast 2001 Forecast 2004
Slide 13: Production constraints
Production constraints Closed Circuiting Demand vs Capacity Other options exist (15%improvement) RM Handling/ Kiln feed system 950,000 900,000 850,000 800,000 750,000 700,000 650,000 600,000 Cooler 550,000 500,000 ICF 450,000 400,000 350,000 300,000 F04 F05 F06 F07 F08 F09 F10 F11 Total Demand (Dome
Slide 14: The decision to upgrade the plant
The decision to upgrade the plant It is cheaper for Golden Bay to produce clinker & cement than to import – if it has capacity. Increasing supply enables economies of scale to be captured. An import strategy exposes GBC to volatility of international clinker/cement prices and freight rates. +
Slide 15: Growing the market - and market share
Growing the market - and market share Key Market Share Determinant Ready mixed concrete accounts for 74% of the NZ market’s cement: ie growing our share has strategic significance Cement Usage Breakdown Readymix Masonry Precast Pipes & tiles Merchant Sales Stabilisation
Slide 16: Product development must continue
Product development must continue Total Revenue - Firth Industries New Products Fy 1997 - 2007 30000000 Total New Product Revenue 2004 - Palermo Paver launched. Introduction of Stadium Seating system. 25000000 2002 - EnviroRange Paving System and Dricon Oxides 2003 - Landmark SRW introduced. system,
Slide 17: Winstones
60 km Winstones Quarry Sales Flat Top 40 km tonnes 20 km Winstone Hunua 1.8m Flat Top 0.5m 10 km Puketutu 0.3-0.45m Three Kings (scoria) 0.15m Three Kings Stevenson Drury 1.2m Puketutu Holcim Wiri Holcim Wiri (Closing 0.7m 30 km 04/05) Hunua 40 km Stevensons Holcim Bombay 0.4m 50 km Holcim Bombay So
Slide 18: Winstones continues to improve!
Winstones continues to improve! Higher selling prices Optimising resources Centralised fleet management – driving lower operating costs
Slide 19: South America
South America The Peruvian business has generated cash and positive EBIT for the last three years. The outlook is for this to continue. Offer for business will be recovered this year! The Bolivian operation was sold. $US10 million repatriated to NZ.
Slide 20: Outlook to FY2007
Outlook to FY2007 Volumes Prices Costs Return on Funds Employed
Slide 21: Analysts Presentation Fletcher Distribution Limited
ANALYSTS PRESENTATION FLETCHER DISTRIBUTION LIMITED
Slide 22: National Coverage
NAIONAL COX Whangaparaca Albany, Auckland Wairau Park, Auckland Cook Street , Auckland Waiheke Island oe Munganoi_ (Tauranga) Mt Wellingotn, Auckland whale tans. Pakuranga, Auckland Takanini, Auckland Te Ku: Morrinsville Seaview, Wellington Kaiwharawhara, Wellington Evans Bay, Wellington, Raccarton,
Slide 23: PlaceMakers Vision
PLACEMAKERS VISION To be the World Class supplier of choice for builders and DIY project customers
Slide 24: Key Categories
KEY CATEGORIES Percentage of Revenue by Product Group Jul 03 - Jun 04 Building Products 63% Decorative Products 21% Hardware Products 16% Building Products Decorative Products Hardware Products
Slide 25: Category Development
CATEGORY DEVELOPMENT • Grow Existing Categories. Initiatives include: Kitchens Bathrooms Flooring Paint • New Categories & Services including: Outdoor/Landscape Doors Lighting
Slide 26: Store Network Development: Under Construction
STORE NETWORK DEVELOPMENT UNDER CONSTRUCTION • Riccarton • Mt. Wellington • Queenstown
Slide 27: Store Network Development: Other New Stores
STORE NETWORK DEVELOPMENT OTHER NEW STORES (REPLACEMENTS) • Whitianga • Invercargill • Porirua • Richmond • Takanini REFURBISHMENTS • 8 stores to be refurbished by June 2006.
Slide 28: Productivity Gains
PRODUCTIVITY GAINS • SmartStart • Supply Chain • Sales/Order Process • Frame & Truss • Staff Training
Slide 29: Frame & Truss Manufacturing
FRAME & TRUSS MANUFACTURING A national/regional approach: •Economies of scale •Process efficiencies •Flexibility •Legislative, health and safety compliance
Slide 30: Acquisitions
ACQUISITIONS Builders Hardware Company Joint Venture YTD June 04 Revenue $18m ROF 40%
Slide 31: Marketing
MARKETING • New trade and retail programs • New brand activity
Slide 32: Sponsorship
SPONSORSHIP • Registered Master Builders’ Association - House of the Year • PlaceMakers V8 International
Slide 33: Financials
FINANCIALS EBIT EBIT SHARE SHARE 80 80 70 70 60 60 50 50 $m $m 40 40 30 30 20 20 10 10 00 A01 A01 A02 A02 A03 A03 A04 A04 FDL FDL JV JV Total Total EBIT EBIT
Slide 34: Disclaimer
DISCLAIMER 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 materially. Media r
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