Fletcher Building Limited · NZX:FBU
Fletcher Building — Macquarie Australia Conference 2015
25 slides from Fletcher Building's conference presentation, May 6, 2015
Slide 1: Presentation to Macquarie Australia Conference
Presentation to Macquarie Australia Conference Gerry Bollman -Chief Financial Officer 6 May 2015
Slide 2: 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
Slide 3: Presentation outline
Presentation outline Fletcher Building Overview Update on group strategy performance Key trends and group performance Cash and Financial Management Outlook 3 Fletcher Building Macquarie Conference Presentation | © May 2015
Slide 4: Fletcher Building Overview
Fletcher Building Overview Fletcher Building is an integrated manufacturer and distributor of infrastructure and building products, as well as a construction company Revenue – 12 months to 30 June 2014: NZ$8,413m Market Capitalisation¹: NZ$5.7Bn Employees: 19,000 • Shareholders Revenues EBIT (as at
Slide 5: A global company with dual listing on NZX, ASX and Auckland head office
Fletcher Building: a global company, with dual listing on the NZX, ASX and a head office in Auckland Revenue: $8.4billion People: 19,000 5 Fletcher Building Macquarie Conference Presentation | © May 2015
Slide 6: Strategy Update
Strategy Update Penrose Campus Redevelopment, Auckland
Slide 7: Our aspiration: top-quartile shareholder value creation through core operational levers
Our aspiration: to deliver top-quartile shareholder value creation through driving core operational levers Capital Management Valuation Multiple Invest capex only where value is clear; drive efficiencies in working capital; exit underperforming businesses; return excess cash to shareholders Return o
Slide 8: Strategy is deployed at three levels of the organisation
Strategy is deployed at three levels of the organisation Where are we now? • Clear view of sustainable competitive advantage • Vision defined Group Portfolio • Focus on greatest value-creating • In execution phase Management opportunities • Clarity on where to invest, hold and • M&A outcomes divest
Slide 9: Fletcher Building's Strategy is focused on 7 Key areas
Fletcher Building’s Strategy is focused on 7 Key areas Manufacture & Supply Raw Material Supply to End- Primary Secondary Extraction & Users & Merchant Distribution Construction Processing Processing Processing Installation Concrete: Ready- Mix, Masonry, Dri. Concrete: NZ + AU Concrete Pipes & Produ
Slide 10: FBUnite business transformation programmes now integrated into the FBU business model
FBUnite business transformation programmes are now fully integrated into the FBU business model CUSTOMER Business Units: Customer-Leading Performance Central Functions Centres Of Excellence Finance Manufacturing HR Supply Chain Legal Sales and Marketing ICT Strategy Procurement Health & Safety Prope
Slide 11: A clear set of strategic priorities
To achieve our aspirations, we have a clear set of strategic priorities Objectives: Strategic Priorities: What does success mean? How do we make it happen? People • Safety Our aspiration is to be…. • Leadership Create a great • Capability place to work • Culture: High performance, High- In the top q
Slide 12: Key trends and group performance
Key trends and group performance Firth EnviroPave, Beachlands
Slide 13: Half Year Highlights
Half Year Highlights NZ Volumes Growth: Cement +13% Canterbury: Aggregates +7% Over 65,000 permanent Concrete +17% repairs completed Concrete Products +10% Plasterboard +8% Steel Reinforcing +32% Further FBUnite Progress: Doors & Windows +8% • $14m additional cost savings delivered in first half Aus
Slide 14: Performance issues in Australian businesses are being addressed
Performance issues in Australian businesses are being addressed Plumbing and bathroom Roofing Sheds + Concrete Products Plastic Pipes distribution Commercial structures Performing in line with Market remains Lower volumes and New management plan competitive with industry over- team in place
Slide 15: New Zealand residential consents up 11%
New Zealand residential consents up 11% to 25,038 Total residential consents 12 month rolling – New Zealand 35,000 Net Migration 12 month rolling – Peak (2004) New Zealand 60,000 30,000 50,000 40,000 25,000 Long term average (2001-2015) 30,000 20,000 20,000 10,000 15,000 0 10,000 -10,000 Mar-04 Mar-
Slide 16: Australian residential consents up 12%
Australian residential consents up 12% with strong recovery in stand-alone housing Total residential consents 12 month rolling – Australia 120,000 35,000 110,000 30,000 100,000 25,000 90,000 20,000 80,000 15,000 70,000 10,000 60,000 5,000 50,000 - Apr-13 Aug-13 Dec-13 Feb-14 Dec-12 Apr-14 Jun-14 Aug
Slide 17: Cash and Financial Management
Cash and Financial Management Decra Roofing Systems, Kenya
Slide 18: Operating cash flow
Operating cash flow Dec 2013 Dec 2014 NZ$m 6 months 6 months Operating earnings before significant items 281 290 Depreciation and amortisation 104 103 Less cash tax paid (32) (29) Less interest paid (66) (63) Other non-cash adjustments (20) (19) Results from operations before working capital 267 282
Slide 19: Capital expenditure expected at bottom end of guidance range
Capital expenditure expected to be at bottom end of guidance range ($275m to $325m) 44 104 103 Dec 2013 Dec 2014 38 NZ$m 6 months 6 months %∆ Stay-in-business 59 72 +22 Growth 38 44 +16 72 Total Capex 97 116 +20 59 Acquisitions 4 0 Depreciation 104 103 -1 1H14 1H15 Stay in Business Depreciation Grow
Slide 20: Capital management settings
Capital management settings Fletcher Building will continue to target strong ‘BBB’ credit characteristics Gearing Target of Net Debt to Net Debt + Equity (including Capital Notes) of 30-40% As at 31 December 2014: 34% Leverage Target Net Debt to EBITDA of 2.0 to 2.5 times As at 31 December 2
Slide 21: Outlook
Outlook Laminex, Australia
Slide 22: Outlook FY15
Outlook FY15 New Zealand Residential consents continuing at levels above long run trend Encouraging outlook for commercial construction Civil infrastructure driven by ongoing government investment Australia Residential construction expected to remain strong Non-residential outlook challeng
Slide 23: Outlook FY15
Outlook FY15 FY15 performance will be impacted by businesses sold in FY14, and substantial completion of the Canterbury Home Repair Programme Earnings from Fletcher Living residential development business now forecast to be up year-on-year Further cost savings from FBUnite of $25m in FY15 Operating
Slide 24: Appendix 1: Divisional and Business Unit Overview
Appendix 1: Divisional and Business Unit Overview Heavy Building Products: Matt Crockett (from 1 July 15) Light Building Products: Francisco Irazusta • Firth + Humes • Winstone Wallboards + Tasman • Golden Bay Cement + Aggregates Insulation • Rocla Products • Stramit • Rocla Quarries • Coated Steel
Slide 25: Appendix 2: Sectoral exposure
Appendix 2: Sectoral exposure Exposures based on revenues Geographical Residential Commercial Infrastructure Other Exposure by Sector¹ (New/A&A)* New Zealand 47% 30% 18% 5% Australia 49% 27% 12% 12% Rest of World 44% 51% 0% 5% Total Manufacturing 47% 32% 13% 8% New Zealand 87% 13% 0% 0% Australia 41
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