Fletcher Building Limited · NZX:FBU
Fletcher Building — Merger or Acquisition (August 2003)
27 slides from Fletcher Building's merger presentation, Aug 19, 2003
Slide 1: Acquisition of Tasman Building Products Pty Limited
Fletcher Building Limited Acquisition of Tasman Building Products Pty Limited 19 August 2003 This presentation has been prepared for investors in New Zealand and Australia and may not be released in the United States. This presentation does not constitute an offer of securities for sale to the publi
Slide 2: Agenda
Agenda Transaction Overview Fletcher Building Products Overview Tasman Overview Financial Impact of Acquisition Acquisition Financing Summary Page 2
Slide 3: Transaction Overview
Transaction Overview Fletcher Building (“FBU”) has agreed to acquire Tasman Building Products Pty Limited (“Tasman”), which comprises insulation, roofing, sinkware and flooring businesses owned by private interests Purchase price is A$230m (~NZ$260m) +/- working capital adjustments Transaction
Slide 4: Consistent with FBU's Acquisition Criteria
Consistent with FBU’s Acquisition Criteria 9 Logical extension of FBU building envelope 9 Leading market positions and recognised brands 9 Quality assets and management Larger and diversified earnings base 9 Attractive acquisition parameters and positive financial 9 impact Page 4
Slide 5: Fletcher Building Products Group
Fletcher Building Products Group Building Products Group Businesses Building Products Group EBIT Existing Tasman 120 112 Winstone Wallboards AHI roofing 100 85 Aluminium Insulation New 80 Easysteel Zealand 58 60 Dimond Insulation Australia 40 Pacific Coilcoaters Roofing USA Acces
Slide 6: Overview of Tasman
Overview of Tasman Tasman Building Products Insulation Roofing Sinkware Flooring NZ Aus NZ US New Zealand and New Zealand. Australia. No.2 in Australia and Australia. No.1 in No.1 in metal tiles stainless sinks New Zealand. insulation products in under “Oliveri: No.1 in access Australasia un
Slide 7: Logical Extension of FBU Building Envelope
Logical Extension of FBU Building Envelope Insulation – Tasman’s New Zealand insulation and FBU’s existing plasterboard business already have supply and marketing relationships – Placemakers is the largest New Zealand distributor of Pink® Batts® Roofing – Tasman’s New Zealand roofing business ex
Slide 8: Recognised Brands
Recognised Brands Insulation Roofing Sinkware Flooring Tasman Building Products US Page 8
Slide 9: Strong Market Positions
Strong Market Positions Insulation Roofing Sinkware Flooring 75% 72% 69% 30% 30% NZ Aus NZ Aus Aus & NZ Glasswool Metal tiles Sinkware Access Flooring market share market share market share market share Source. Tasman Management estimates Page 9
Slide 10: Quality Assets
Quality Assets Roofing • Auckland • Corona, California Insulation • Glasswool plant, Auckland • Foil plant, Auckland Sinkware • Glasswool plant, Christchurch • Glasswool plant, Sydney NSW • Adelaide, Vic • Polyester plant, Sydney, NSW Flooring • Foil Plant, Sydney, NSW • Sydney, NSW Page 10
Slide 11: Diversified Business and Geographic Mix
Diversified Business and Geographic Mix Tasman - FY2003 SinkwareRevenue Access Other Sinkware Flooring (Incl. 11% 2% USA) 21% Australia Insulation 48% 47% Roofing New 40% Zealand 31% Source. Tasman Management accounts Page 11
Slide 12: Experienced Management Team
Experienced Management Team Insulation Roofing Sinkware Flooring AHI Roofing Tasman Tasman Access Tasman (NZ) Sinkware Floors Insulation Australia General Manager General Manager General Manager Peter Stichbury Bryant Walters Ron Rigby General Manager Tony Dragicevich 24 years* 16 years* 17
Slide 13: Stable Earnings Track Record
Stable Earnings Track Record Years ended 30 June A$m 2001(A) 2002(A) 2003* Sales 210 217 243 EBITDA 32 34 40 EBIT 22 24 30 * Preliminary – subject to final audit Source. Tasman Management accounts Page 13
Slide 14: Attractive Acquisition Parameters
Attractive Acquisition Parameters A$m 2003 Est 1 Purchase Price 230 Tasman 2003 EBITDA estimate 40 EV/EBITDA multiple 5.8x 1. Estimated goodwill on acquisition is A$116m, including existing goodwill of A$38m. Estimated brand valuation is A$20m. Excludes transaction costs Page 14
Slide 15: Identified Synergies and Growth Opportunities
Identified Synergies and Growth Opportunities Synergies Growth opportunities • Synergies estimated at • Growth opportunities include: approximately NZ$5m p.a., from year 2 – Insulation. Gains expected from adoption of new energy efficiency standards in Australia and New • Key areas include: Zealand
Slide 16: Positive Financial Impact
Positive Financial Impact 2003 Pro forma NZ$m FBU FBU + Tasman % increase EBITDA 429 475 10.7% EPS (pre goodwill) 45.2c 47.4c 4.9% EPS (post goodwill) 43.4c 43.5c 0.2% Notes: Assumes underwritten placement of 20 million shares Includes transaction costs. Excludes any synergies Page 16
Slide 17: Appropriate Funding Mix
Appropriate Funding Mix Tasman Funding Effect on FBU Funding Equity ≈ NZ$80m 1 Equity Equity ≈ 34% NZ$860m NZ$940m ≈ 30% ≈ 50.1% ≈ 47.5% Debt ≈ NZ$180m Debt Debt NZ$1,038m ≈≈ 70% NZ$858m 66% ≈ 70% ≈ 49.9% ≈ 52.5% Acquisition NZ$260m Pre transaction Post transaction (A$230m) (FBU + Tasman (FBU 30 Jun
Slide 18: Equity Capital Raising Indicative Timetable
Equity Capital Raising Indicative Timetable Tuesday 19 August • 9am announcement of placement • 10am FBU suspended on NZX and ASX • 2pm bookbuild commences • 8pm books close for NZ and Australian institutions • Wednesday 20 August • 7:30am final book close • 9:45am allocations finalised • 10am FBU
Slide 19: Summary
Summary 9 Logical extension of FBU building envelope 9 Leading market positions and recognised brands 9 Quality assets and management Larger and diversified earnings base 9 Attractive acquisition parameters and positive financial 9 impact Page 19
Slide 20: Appendix
Building Appendix Page 20
Slide 21: Overview of Tasman
Overview of Tasman Insulation Roofing Access Sinkware Floors Australia New Zealand New Zealand US • Glasswool, polyester, building • Steel based roofing tiles, shakes • Steel sinks • Access (raised) membranes and foil laminates and shingles flooring systems Products • Licences technology in several
Slide 22: Overview of Tasman
Overview of Tasman Insulation Roofing Access Sinkware Floors Australia New Zealand New Zealand USA • Hardware • Large merchant • Independent • Merchant • Plumbing • Commercial chains distributors wholesalers merchants construction • Roofing projects • Group house (new channel) • Hardware retail Key
Slide 23: Plant Facilities
Plant Facilities Plant site Approximate Capacity p.a. • Rooty Hill, Glasswool plant 12,000 tonne • Rooty Hill, Foil 30 million m2 • Minto, Polyester plant 4,500 tonne Insulation • Auckland, Glasswool plant 9,000 tonne • Christchurch, Glasswool plant 5,000 tonne • Auckland, Foil plant 15 million m2 •
Slide 24: History of Tasman
History of Tasman LJ Fisher & Company (“LJF”) operated a successful roofing 1960’s and aluminium business in Auckland Alex Harvey Industries (“Alex Harvey”) acquired LJF to 1969 -1970 complement Alex Harvey’s other building products activities including glasswool Alex Harvey and Carter Holt Harvey m
Slide 25: FBU 2003 Results Summary
FBU 2003 Results Summary Jun Jun 2003 2002 YOY $m 12 Mths 12 Mths Change Revenue 3221 2966 +9% EBITDA 429 294 +46% EBITA 338 212 +59% EBIT Before Unusuals 331 205 +61% Net Earnings Before Unusuals 168 88 +91% Net Earnings 168 93 +81% EPS Before Unusuals (cents) 43.4 25.5 +70% EPS After Unusuals (cen
Slide 26: FBU Segmental EBIT
FBU Segmental EBIT Jun Jun 2003 2002 YOY $m 12 Mths 12 Mths Change Building Products 112 85 +32% Distribution 55 34 +62% Concrete 83 60 +38% Construction 34 30 +13% Laminex 44 N/A Corporate/Unallocated 3 -4 N/A EBIT Pre Unusuals as per Accounts 331 205 +61% Page 26
Slide 27: FBU Simplified Balance Sheet
FBU Simplified Balance Sheet Jun Jun 2003 2002 NZ$m NZ$m Assets Current Assets 919 637 Fixed Assets 969 666 Intangibles & Goodwill 198 8 Provision for Taxation 104 108 Investments 155 72 Total Fletcher Building Assets 2345 1491 Liabilities Current Liabilities 627 502 Net Term Debt 502 168 Capital No
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