Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (November 2020)
34 slides from Fletcher Building's shareholder meeting presentation, Nov 25, 2020
Slide 1: 2020 Annual Shareholders' Meeting
2020 Annual Shareholders’ Meeting 25 November 2020 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 2: Bruce Hassall, Chair
Bruce Hassall Chair Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 3: Directors
Directors Martin Brydon Barbara Chapman Peter Crowley Rob McDonald Doug McKay Cathy Quinn 3 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 4: Meeting agenda
Meeting agenda Chair’s address Chief Executive Officer’s address Voting on Resolutions General Q&A 4 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 5: FY2020 a challenging year comprehensively and effectively dealt with
FY2020 a challenging year comprehensively and effectively dealt with 3. Remained focused 1. Responded quickly 2. Business well set on our overall plan, to COVID-19 up for FY21 and strategy and restrictions, shut beyond growth ambitions down and start-up remain unchanged Board and Management worked v
Slide 6: Responded quickly to NZ shut down and start up and Australia restrictions
Responded quickly to NZ shut down and start up and Australia restrictions Safely shut down and restarted NZ businesses and dealt with Australia restrictions Maintained customer service and performance People and mental health and well-being, Support Hub App, Bridging Pay Programme (NZ govt supported
Slide 7: Actions taken to set up for FY2021 and beyond despite market uncertainty
Actions taken to set up for FY2021 and beyond despite market uncertainty Actions Impact ➢ Costs reduced and workforce reorganised to ➢ Fixed cost reduction of c$150m in FY21 prepare for market uncertainty ➢ Additional variable cost reductions to meet market ➢ Board, Exec and GM remuneration reduced
Slide 8: FY2020 results at a glance
FY2020 results at a glance Revenue Net Earnings/(Loss) EBIT* EPS $7,309m ($196)m $160m (23.5c) FY2019 $8,308m FY2019 $246m FY2019 $549m FY2019 28.8c * Before significant items Cash flows from Leverage ratio EBIT margin Dividend operating activities $410m 0.9x 2.2% nil Target range: 1.0-2.0x FY2019:
Slide 9: FY2020 balanced scorecard
FY2020 balanced scorecard Safety Engagement Total Recordable Injury Serious Injuries 2 Employee Engagement Rating 4 Frequency Rate 1 70% 71% 6.9 33 67% 66% 5.1 5.0 5.7 21 20 8 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY16 FY17 FY18 FY19 Sustainability Customer Carbon (CO2) Emissions Net Promoter Scor
Slide 10: Strong Governance through COVID-19 as well as action on safety, culture and performance
Strong Governance through COVID-19 as well as action on safety, culture and performance • Protect Reset and Protect Value launch • Focus on delivery of strategy, listening to shareholders and actioning feedback Safety, Health, Environment Remuneration Committee Audit and Risk Committee and Sustainab
Slide 11: Sustainability strategy
Sustainability strategy BE THE LEADER IN MAKING SUSTAINABLE BUILDING PRODUCTS FIRST to set a Science Based Carbon Target in our Sector, in New CAREFUL MANAGEMENT Zealand and Australia OF OUR RESOURCES TRANSPARENT AND EMISSIONS ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING PARTNER WITH OUR SUPPLY CH
Slide 12: Summary
Summary ➢ FY20 a tough year for all stakeholders ➢ Proud of how our people and Board members worked together remaining focused on steering the Company through a challenging period while setting up for FY21 and beyond ➢ Pleasing year-to-date trading performance in FY21 ➢ Balance sheet and liquidity s
Slide 13: Ross Taylor, Chief Executive Officer
Ross Taylor Chief Executive Officer Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 14: FY2020 tough year well handled
FY2020 tough year well handled • Responded quickly to COVID-19 impacts FY20 • Very proud of our people and their resilience • Sig. items but strong cash & balance sheet FY21 • Positioned cost base for potential reduced activity in FY21 set-up • Accelerated key ecommerce activities • Debt lines and l
Slide 15: Two years into strategy – Business is reset and stabilised
Two years into strategy – Business is reset and stabilised To be the undisputed leader in New Zealand and Australian building products & solutions FY2019 FY2020 FY2021–23 REFOCUS AND PERFORMANCE PERFORMANCE AND GROWTH STABILISE 15 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 16: Key areas we are driving
Key areas we are driving Safety Customer Operational Business Innovation and disciplines performance Sustainability 16 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 17: Positions us well to drive shareholder returns into the future
Positions us well to drive shareholder returns into the future FY23 Key Financial Targets Focus ➢ Revenue growth > market growth Consistency ➢ Group EBIT margin >10% ➢ Return on Funds Employed (ROFE) >15% Leveraged to upside Strong balance sheet, strong cash flows Well positioned for macro trends 17
Slide 18: Trading update – Safety focus continues
Trading update 4 months ended 31 October 2020 – Safety focus continues with a strong emphasis on critical risks Safety Total Recordable Injury Serious Injuries 2 Frequency Rate 1 33 6.9 5.96 5.7 5.1 21 5.0 20 8 4 FY17 FY18 FY19 FY20 4 mths FY21 FY17 FY18 FY19 FY20 4 mths FY21 1 TRIFR = Total no. of
Slide 19: Trading update – Improved operating efficiency and margins
Trading update 4 months ended 31 October 2020 – Improved operating efficiency and margins across all businesses Performance and Growth Revenue ($b) EBIT before sig items ($m) EBIT margin (%) +1% 8.4% 2,683 2,698 +55% 227 5.5% 147 4 mths FY20 4 mths FY21 4 mths FY20 4 mths FY21 4 mths FY20 4 mths FY2
Slide 20: NZ Core – Key focus areas
Building Products NZ Core – Key focus areas Distribution Concrete 1 Operational excellence 2 Product innovation & sustainability 3 Leading customer services & solutions, esp. via digital 20 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 21: NZ Core – What we are delivering
Building Products NZ Core – What we are delivering Distribution Concrete Operational excellence Product innovation & sustainability Dimond’s largest roll to roof project in NZ EBIT Margin Jul-Oct, 2018-2021 Iplex’s new 25m trailer carrying first 11.9% load from mobile extraction plant 10.3% 9.8% 9.5
Slide 22: NZ Core – What we are delivering (digital)
Building Products NZ Core – What we are delivering Distribution Concrete Leading customer services & solutions, esp. via digital ~$1.2m >50k 70% of website / digital sales for Laminex NZ in Oct-20 products online of all products delivered across Distribution from a PlaceMakers branch by Jan-21 have
Slide 23: Residential and Development – Key focus areas
Residential and Development – Key focus areas 1 Grow to 1,000 units p.a. Land Dev at least $25m p.a. 2 Clever Core panelisation plant drives speed and quality 3 Scale our apartments business 23 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 24: Residential and Development – What we are delivering
Residential and Development – What we are delivering Grow to 1,000 units p.a. Land Development continues at least $25m EBIT p.a. Residential units sold • Second transaction of former Crane Copper Tube site in Sydney forecast to settle in H2 800 • Sale of Rocla site in Brisbane expected in H2, and sa
Slide 25: Residential and Development – What we are delivering
Residential and Development – What we are delivering Clever Core panelisation plant drives speed and quality Scale our apartments business • Productivity uplift, ability to significantly reduce build times vs. traditional stick build • Building materials waste reduction, streamlined consenting and c
Slide 26: Construction – Key focus areas
Construction – Key focus areas 1 Improved operating skills, disciplines and governance 2 Complete legacy projects within provisions 3 Winning the right work with the right customers 26 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 27: Construction – What we are delivering
Construction – What we are delivering Reshaping the risk profile of the order book Winning the right work with the right customers Work to Complete ($b) • Watercare Enterprise Model, 10 year contract • Auckland International Airport Runway • AMETI1 Eastern Busway Alliance 0.7 • Strong pipeline of pa
Slide 28: Australia – Key focus areas
Australia – Key focus areas 1 Operational excellence 2 Product innovation & sustainability 3 Leading customer services & solutions, esp. via digital 28 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 29: Australia – What we are delivering
Australia – What we are delivering Operational excellence Product innovation & sustainability EBIT Margin Fletcher Jul-Oct, 2018-2021 Insulation’s 4.4% FirmaSoft 4.0% 2.6% 2.3% Laminex AU’s largest product launch in 25 years FY18 FY19 FY20 FY21 Stramit’s Sharpline® roof Oliveri’s expansion into bath
Slide 30: Australia – What we are delivering (digital)
Australia – What we are delivering Leading customer services & solutions, esp. via digital Laminex % total customers digital sales 27% >$170m Laminex eCommerce revenue 10% since launch in Apr-19 Jul'19 Oct'20 Tradelink’s new B2C transactional website launched in Nov-20 30 Fletcher Building Limited A
Slide 31: FY2021 outlook
FY2021 outlook ➢ 1H21 – volumes expected to remain in line with year-to-date trading: NZ slightly higher YOY, AU slightly lower YOY Market ➢ 2H21 – trading conditions less certain, impact of macro-economic factors on our markets not yet clear outlook ➢ Further update on market activity will be provi
Slide 32: Resolutions and Voting
Resolutions and Voting Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 33: Resolutions
Resolutions Ordinary Resolutions • Resolution 1 – Re-election of Martin Brydon • Resolution 2 – Re-election of Barbara Chapman • Resolution 3 – Re-election of Bruce Hassall • Resolution 4 – Auditor fees and expenses 33 Fletcher Building Limited Annual Shareholders’ Meeting 2020
Slide 34: Important Information
Important Information This presentation has been prepared by Fletcher Building Limited and its group of companies (“Fletcher Building”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it. This presentation dated 25 Nove
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