Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (October 2014)
42 slides from Fletcher Building's shareholder meeting presentation, Oct 21, 2014
Slide 1: 2014 Annual Shareholders' Meeting
2014 Annual Shareholders’ Meeting 21 October 2014 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 2: Ralph Waters, Chairman
Ralph Waters Chairman 2 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 3: Directors
Directors Ralph Waters (Chairman) Tony Carter Dr Alan Jackson John Judge Mark Adamson (Managing Director) Sir Ralph Norris Kathryn Spargo Cecilia Tarrant Gene Tilbrook 3 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 4: Meeting agenda
Meeting agenda Chairman’s overview • 2014 financial performance • Board changes Chief Executive Officer’s address • Progress on strategic priorities Trading and financial outlook General business Voting on resolutions 4 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 5: Revenue – underlying revenue growth of 4%
Results Overview Revenue – underlying revenue growth of 4% $ 8,401 REVENUES down 1% million Revenue growth rates Geographic segments in local currency New Zealand +5% Australia +2% Rest of World +5% 5 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 6: Net earnings
Results Overview Net earnings • Reported net earnings up $339 4% to $339m million NET EARNINGS up 4% $362 NET EARNINGS before significant items million • Net earnings before significant items were up up 11% 11% to $362m 6 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 7: Operating earnings before significant items
Results Overview Operating Earnings before significant items • Operating earnings excluding significant items $624 OPERATING EARNINGS before million up 10% • Within guidance range of significant items up 10% $610m - $650m • Excluding foreign currency translation impacts, EBIT would have been up 15%
Slide 8: New Zealand residential consents at highest level since 2007
New Zealand residential consents at highest level since 2007 24,000 23,000 Long run average (2001-2014) 22,000 21,000 20,000 19,000 18,000 17,000 16,000 15,000 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Total residential consents 12 month rolling – New Zealand Source: Stat
Slide 9: New Zealand operating earnings up 27%
New Zealand operating earnings up 27% EBIT¹ NZ$m 362 286 New Zealand Year ended June 2013 Year ended June 2014 1. Before significant items 9 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 10: Australian residential consents up 21%
Australian residential consents up 21% multi-unit dwellings up strongly 110,000 100,000 90,000 80,000 70,000 60,000 50,000 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Standalone Multi residential Total residential consents 12 month rolling – Australia Source: Australian Bureau of
Slide 11: Australian operating earnings impacted by currency translation and lower volumes
Australian operating earnings impacted by currency translation and lower volumes EBIT¹ NZ$m 203 171 Australia Year ended June 2013 Year ended June 2014 1. Before significant items 11 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 12: Rest of World operating earnings rose by 14%
Rest of World operating earnings rose by 14% EBIT¹ NZ$m 91 80 Rest of World Year ended June 2013 Year ended June 2014 1. Before significant items 12 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 13: Every division increased operating earnings
Every division increased operating earnings EBIT¹ NZ$m 222 229 135 122 120 124 105 87 51 42 17 8 Infrastructure Building Laminates & Distribution NZ Distribution Aus Construction Products Products Panels 12 months to June 13 12 months to June 14 1. Before significant items 13 Fletcher Building Annua
Slide 14: Dividend
Results Overview Dividend • Dividend Policy: target 36 c dividend pay-out in the range of 50% to 75% of net earnings DIVIDEND PER SHARE up 6% • Final dividend per share – 18 cents 14 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 15: Total shareholder return: 9% for year to June 2014
Total shareholder return: 9% for year to 30 June 2014 Total Shareholder Return (TSR) Percentage 51 24 14 9 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 -27 15 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 16: Maintaining a strong balance sheet
Maintaining a strong balance sheet Net Debt/Net Debt Plus Equity Percentage Gearing target range of net debt to net debt plus equity of 30% to 40% 37 33 32 Jun-12 Jun-13 Jun-14 16 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 17: Progress on strategic priorities
Progress on strategic priorities Review of business portfolio: divestment of Pacific Steel and Hudson Building Supplies $25m in benefits from FBUnite Expansion of NZ residential development business New Formica plant in China commissioned Employee development and engagement 17 Fletcher Building Annu
Slide 18: Board changes
Board changes Ralph Waters will retire from the board at conclusion of 2014 Annual Shareholders’ Meeting Sir Ralph Norris appointed Chairman to succeed Ralph Waters 18 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 19: Mark Adamson, Chief Executive Officer
Mark Adamson Chief Executive Officer 19 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 20: Earnings mix reflects economic performance of key markets
Earnings mix reflects economic performance of key markets • Revenue EBIT¹ (12 months to June 2014) (12 months to June 2014) 13% 15% 48% 27% 58% 39% New Zealand Australia Rest of World New Zealand Australia Rest of World 1. Before significant items 20 Fletcher Building Annual Shareholders’ Meeting |
Slide 21: Strategic priorities
Strategic priorities Productivity improvement • FBUnite business transformation programme Active portfolio management Organic growth opportunities Investment in people capability 21 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 22: Productivity improvement through FBUnite
Productivity improvement through FBUnite Transforming how Fletcher Building operates • Reducing operating cost base through centralisation of common functions • Developing future strategies and platforms for growth • Multi-year programme Expecting pre-tax benefits of $100 million per annum by 2018 f
Slide 23: FBUnite 2014 achievements
FBUnite 2014 achievements $25m in benefits delivered in FY2014 Procurement function delivered significant cost savings Centralised property management team addressing 1,000 properties across New Zealand & Australia Manufacturing excellence programme – establishment phase completed IT and digital str
Slide 24: Managing the portfolio of business
Managing the portfolio of business Pacific Steel sold to Bluescope/NZ Steel • Sale followed strategic review of steel manufacturing Secured the future of long steel manufacturing in New Zealand Sale of Hudson Building Supplies completed in September 2014 Crane Copper Tube closure – unable to compete
Slide 25: Delivering growth from existing business portfolio
Delivering growth from existing business portfolio Organic growth delivered through: • Market share gains • Margin expansion • Product innovation • Geographic expansion Capturing growth from economic cycle: NZ operating earnings¹ up 27% Strong volume increases in most NZ businesses 1. EBIT before si
Slide 26: New Zealand Residential strategy update
New Zealand Residential strategy update Broader offering of stand-alone and terrace homes, and apartments Goal to increase number of homes sold each year to 1,000 Land acquisition has increased in Auckland for future development Fletcher Living, Stonefields Stonefields development will be largely bu
Slide 27: Construction backlog up from $1 billion to $1.8 billion
Construction backlog up from $1 billion to $1.8 billion Waterview Tunnel Christchurch Justice and Emergency Services Precinct McKay to Peka Peka 27 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 28: Tradelink: Operating earnings up strongly
Tradelink: Operating earnings up strongly 28 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 29: New Formica plant commissioned in JuiJiang, China
New Formica plant commission in JuiJiang, China 29 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 30: Fletcher Building Annual Shareholders’ Meeting | © October 2014
30 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 31: Investing in our people
Investing in our people Fletcher Building Learning Academy provides targeted employee development: Leadership development Sales force effectiveness Talent assessment framework FBUsay: Annual Employee engagement survey 31 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 32: Continued improvement in Safety performance
Continued improvement in Safety performance Total recordable injury frequency rate* 14.0 11.1 8.5 6.8 6.0 2010 2011 2012 2013 2014 * Total injuries per million employee and contractor hours 32 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 33: Canterbury update
Canterbury update Fletcher EQR: nearing completion of 70,000 permanent home repairs Infrastructure repairs now half completed Commercial rebuild gaining momentum with Government anchor projects now starting 33 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 34: Priorities for 2015
Priorities for 2015 Capture growth from the cycle Improve operational performance through manufacturing excellence programme Further investment in lifting effectiveness of sales and marketing activities Pursue further $25 million in benefits from FBUnite Improve cash generation through focus on cape
Slide 35: Ralph Waters career
Ralph Waters Chief Executive Officer 2001-2005 Non-Executive Director 2005-2010 Chairman 2010-2014 35 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 36: Ralph Waters, Chairman
Ralph Waters Chairman 36 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 37: Outlook: New Zealand and Australia
Outlook New Zealand and Australia New Zealand Continued strong residential construction activity Residential consents expected to track above long term trend Civil infrastructure driven by ongoing government investment Positive trend in commercial consents will underpin non- residential sect
Slide 38: Outlook: Rest of World
Outlook Rest of World North America Moderation in pace of new housing construction Commercial activity up-turn remains elusive Europe Modest improvement driven by stronger UK market Asia Further growth in South Eastern Asian markets China and Taiwan likely to be flat 38 Fletcher Building A
Slide 39: Financial Outlook
Financial Outlook Earnings before interest, tax and significant items expected to be in the range of $650 million to $690 million First half earnings likely to be broadly flat on the prior corresponding period Second half earnings expected to be significantly ahead of the prior corresponding period
Slide 40: Ralph Waters, Chairman
Ralph Waters Chairman 40 Fletcher Building Annual Shareholders’ Meeting | © October 2014
Slide 41: General Business
General Business 41 Fletcher Building Annual Shareholders’ Meeting © October 2014
Slide 42: 2014 Annual Shareholders' Meeting
2014 Annual Shareholders’ Meeting 21 October 2014 Fletcher Building Annual Shareholders’ Meeting | © October 2014
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