Fletcher Building Limited · NZX:FBU
Fletcher Building — ABN Amro NZ Day, Citigroup Australia/NZ Investment Conference, Goldman Sachs JBWere Austra (March 2007)
42 slides from Fletcher Building's conference presentation, March 2007
Slide 1: Presentation to ABN Amro NZ Day
Presentation to ABN Amro NZ Day (Sydney) Citigroup Australia/NZ Investment Conference (London) Goldman Sachs JBWere Australasian Investment Forum (New York) Jonathan Ling Chief Executive Officer March 2007 Ralph Waters 11 August 2004 Chief Executive Officer
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: What is Fletcher Building?
What is Fletcher Building? Ralph Waters 11 August 2004 Chief Executive Officer
Slide 4: Fletcher Building
4 Fletcher Building One of New Zealand’s top industrial companies with a history going back to the early 1900’s. The leader in the NZ building industry. FBU is listed on NZX and ASX. Strong market shares in all its building sectors. Full information on www.fletcherbuilding.co.nz March 2007
Slide 5: Company Dimensions
5 Company Dimensions Revenue: NZ$6.0 billion Market cap: >NZ$5.4 billion No.2 on NZX Employees: Over 16,000 Shares: 472 million Daily average turnover ≈1 million shares Shareholders: NZ 43% Aust 33% USA 13% Other 11% March 2007
Slide 6: Net Earnings
6 Net Earnings $million 379 347 240 193 168 93 Jun-02 Jun-03 Jun-04 Jun-05 ¹ Jun-06 Dec 06 (6 mths) 1. Restated for IFRS March 2007
Slide 7: Key Ratios
7 Key Ratios Total Shareholder Return (TSR)1 Percentage 61 43 40 33 24 24 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Dec 06 (6 mths) 1. TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) March 2007
Slide 8: The Fletcher Building Value Chain Delivers High Returns
8 The Fletcher Building Value Chain Delivers High Returns Laminates Building Other & Steel Concrete Products Manufacturers Panels Dedicated Shared Other Distribution Distribution Construction Distribution Markets Markets March 2007
Slide 9: March 2007
9 Fletcher & Tasman Insulation sarking overlay Pynefloor® particleboard flooring Fletcher Steel Plyco doors Stramit, Dimond or AHI roofing structural steel I beams Fletcher & Tasman Insulation Laminex insulation high pressure laminates Fletcher & Tasman Insulation house wrap Oliveri & Lakeland sinks
Slide 10: Geographic Diversity
10 Geographic Diversity Operating Earnings 6 Months Dec 06 6 Months Dec 05 Other Other 5% 4% Australia Australia 32% 30% NZ NZ 63% 66% March 2007
Slide 11: Market Diversity
11 Market Diversity Operating Earnings 6 Months Dec 06 6 Months Dec 05 Steel Steel 13% 11% Infrastructure Infrastructure 36% Distribution Distribution 37% 11% 11% Laminates & Panels Laminates 18% & Panels 19% Building Products Building Products 21% 23% March 2007
Slide 12: Infrastructure - Concrete
12 Infrastructure - Concrete 50% of NZ cement market 33% of NZ RMC market 25% of NZ aggregates market 60% of NZ + 35% of Australia concrete pipe market 30% NSW and 80% of WA sand market March 2007
Slide 13: Infrastructure - Construction
13 Infrastructure - Construction New Zealand’s leading construction company Commercial (Buildings) Engineering (Infrastructure) South Pacific (General) Residential (NZ largest home builder) March 2007
Slide 14: Building Products
14 Building Products 94% of NZ market No.2 in NZ No.1 in Australasia with 60% Australia, 80% NZ glass wool market No.1 in NZ commercial insulation No.1 in Australasia (also facility in California) No.2 in Australasia No.1 in Australasia March 2007
Slide 15: Steel
15 Steel Long Steel 50% of Sims (scrap metal) Sole producer of long products in NZ 250,000 EAF steel mill (rod, bar & wire) March 2007
Slide 16: Steel
16 Steel Roll Forming 30% Australia & NZ rollforming market 50% of flat steel painting in NZ General steel distribution March 2007
Slide 17: Laminates & Panels
17 Laminates & Panels HPL (2 mills) No.1 in Australasia Decorated Board No.1 Australasia MDF (2 mills) No.2 in Australasia Particle Board (2 mills) No.2 in Australasia Over 50 owned distribution Hardboard (1 mill) outlets across Australasia No.2 in Australasia March 2007
Slide 18: Distribution
18 Distribution 59 operating sites 36% of building materials market Joint Venture rather than franchise Trade focus – 80% of sales No.1 in segment March 2007
Slide 19: Results
Results For the Six Months to 31 Dec 2006 Ralph Waters 11 August 2004 Chief Executive Officer
Slide 20: Highlights
20 Highlights Net Earnings $193 million Geographic and product diversification continues to deliver improved earnings despite softer markets EPS 41.1 cps Interim dividend increased to 22cps – Increased Returns the 10th consecutive dividend increase To Shareholders TSR of 24% for the six months Progr
Slide 21: Summary of Results
21 Summary of Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 2980 2764 5520 EBITDA 418 406 819 EBIT 340 335 675 Net Earnings 193 190 379 EPS (cents) 41.1 40.9 81.3 Dividend cps 22.0 19.0 40.0 March 2007
Slide 22: Strong Earnings In All Divisions
22 Strong Earnings In All Divisions EBIT $m 125 122 Dec 2005 Dec 2006 77 72 65 62 46 38 36 39 Building Products Steel Distribution Infrastructure Laminates & Panels March 2007
Slide 23: Building Products Results
23 Building Products Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 344 326 629 EBIT 72 77 142 Margin % 20.9 23.6 22.6 Funds 557 477 511 Return on Funds % 27.8 1 32.3 27.8 1. Proforma returns based on 6 months of acquisitions March 2007
Slide 24: Steel Results
24 Steel Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 602 550 1082 EBIT 46 38 93 Margin % 7.6 6.9 8.6 Funds 474 439 461 Return on Funds % 19.4 17.3 20.2 March 2007
Slide 25: Distribution Results
25 Distribution Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 518 493 956 EBIT 39 36 75 Margin % 7.5 7.3 7.8 Funds 149 128 132 Return on Funds % 52.3 56.3 56.8 March 2007
Slide 26: Infrastructure Results
26 Infrastructure Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 962 889 1823 EBIT 122 125 255 Margin % 12.7 14.1 14.0 Funds 769 704 766 Return on Funds % 31.7 35.5 33.3 March 2007
Slide 27: Laminates & Panels Results
27 Laminates & Panels Results Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths Sales 553 505 1027 EBIT 65 62 116 Margin % 11.8 12.3 11.3 Funds 869 835 920 Return on Funds % 15.0 14.9 12.6 March 2007
Slide 28: Net Earnings
28 Net Earnings Dec Dec Jun 2006 2005 2006 $m 6 Mths 6 Mths 12 Mths EBIT 340 335 675 Interest 45 45 88 Tax 92 90 189 Minority Interests 10 10 19 Net Earnings 193 190 379 March 2007
Slide 29: Simplified Balance Sheet
29 Simplified Balance Sheet Dec Jun 2006 2006 NZ$m NZ$m Assets Current Assets 1668 1616 Fixed Assets 1534 1569 Intangibles & Goodwill 624 597 Provision for Deferred Taxation -3 29 Investments 135 129 Total Fletcher Building Assets 3958 3940 Liabilities Current Liabilities 1075 1079 Net Debt 1070 106
Slide 30: Key Ratios
30 Key Ratios Total Shareholder Return (TSR)1 Percentage 61 43 40 33 24 24 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Dec 06 (6 mths) 1. TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) March 2007
Slide 31: Key Ratios
31 Key Ratios Debt/Debt Plus Equity Percentage 49.9 43.1 44.4 40.2 37.1 37.1 Jun 02 Jun 03 Jun 04 Jun 05¹ Jun 06 Dec 06 (6 mths) 1. Restated for IFRS March 2007
Slide 32: Key Ratios
32 Key Ratios Return on Average Equity¹ Percentage 29.5 24.3 24.6 21.8 23.0 16.9 Jun 02 Jun 03 Jun 04 Jun 05² Jun 06 Dec 06 (6 mths) 1. Net earnings/shareholders funds 2. Restated for IFRS March 2007
Slide 33: Key Ratios
33 Key Ratios Return on Average Funds¹ Percentage 29.3 26.1 24.5 24.4 24.7 23.1 Jun 02 Jun 03 Jun 04 Jun 05² Jun 06 Dec 06 (6 mths) 1. EBIT/(Average net debt+equity+capital notes) - deferred tax asset 2. Restated for IFRS March 2007
Slide 34: Key Ratios
34 Key Ratios Interest Cover¹ Times 9.6 9.3 9.3 7.8 7.3 5.8 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Dec 06 (6 mths) 1. EBITDA pre unusuals/interest paid including capital note interest March 2007
Slide 35: Strategic Update
Strategic Update Ralph Waters 11 August 2004 Chief Executive Officer
Slide 36: Strategic Agenda
36 Strategic Agenda Earnings Reliability Internal Growth External Growth March 2007
Slide 37: Earnings Reliability
37 Earnings Reliability Company outlook should be cognisant of both product and geographic diversity. For New Zealand – Infometrics November estimate of total volume of work commenced. For Australia – BIS December estimate of total volume of work commenced. March 2007
Slide 38: New Zealand Volume of Work Commenced
38 New Zealand Volume of Work Commenced 15 Forecast +3% +1% -4% +5% -6% +5% +4% +5% 10 -2% +3% NZ$b -9% +3% +2% +1% -2% 5 +3% 0% -2% +1% +3% -2% +9% +3% -1% -16% 0 01 02 03 04 05 06 07 08 09 10 11 Residential A&A Non-residential Infrastructure Source : Infometrics in constant 1995/96 prices March 20
Slide 39: Australia Volume of Work Commenced
39 Australia Volume of Work Commenced A$b 120 Engineering construction Non-residential 10% 1% 0% -1% 100 Residential 80 25% -1% -1% -8% 60 11% 9% -3% -10% 40 13% 20 -5% -4% 2% 0 Year ended June 2001 2002 2003 2004 2005 2006 2007 f 2008 f 2009 f Source : BIS Shrapnel Building in Australia Update in c
Slide 40: Outlook
40 Outlook Residential markets in Australia and New Zealand continue to soften. Growth in non-residential and infrastructure markets. Still comfortable with the analysts’ November consensus net earnings forecast of approximately $388 million excluding resolution of Taupo MDF Mill and Pacific S
Slide 41: Earnings Forecast
41 Earnings Forecast Operating Earnings NZ$m 690 675 612 460 331 340 205 Jun 02¹ Jun 03 Jun 04 Jun 05² Jun 06 Jun 07 Concensus Forecast Nov 06 1. Pre Unusuals 2. Restated for IFRS March 2007
Slide 42: Ralph Waters Chief Executive Officer 11 August 2004
Ralph Waters 11 August 2004 Chief Executive Officer