Fletcher Building Limited · NZX:FBU
Fletcher Building — FY2001 Earnings Presentation
34 slides from Fletcher Building's earnings presentation, Aug 22, 2001
Slide 1: Annual Results Presentation
Annual Results Presentation 22 August 2001
Slide 2: Annual Results Presentation dated 22 August 2001 notice
This Annual Results Presentation dated 22 August 2001 provides additional comment on the media release of the same date. As such, it should be read in conjunction with and subject to the explanations and views of future outlook on market conditions, earnings and activities given in that release.
Slide 3: Summary of Results
Summary of Results $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Revenue 696 2273 2380 EBITDA 66 184 254 EBIT Before Unusuals 42 94 170 NPAT Before Unusuals 22 34 106 EPS Before Unusuals (cents) 18.2* 5.2 27.5 * Annualised 1
Slide 4: Segmental EBIT
Segmental EBIT $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Building Products and Steel 16 58 87 Distribution 4 6 8 Concrete 15 31 56 Construction/Residential/ 9 5 18 Property Corporate/Unallocated -2 -6 1 EBIT Before Unusuals 42 94 170 2
Slide 5: Building Products and Steel Results
Building Products and Steel Results $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Revenue 232 840 852 EBIT 16 58 87 Funds 439 439 510 Return on Funds 13.5% 13.2% 17.1% 3
Slide 6: Building Products and Steel: Winstone Wallboards
Building Products and Steel Winstone Wallboards – Domestic sales volumes decreased by 12%, market share held – Sales revenue declined 3% – Performance board mix increased – EBIT down but less than 10% 4
Slide 7: Building Products and Steel: Fletcher Wood Panels
Building Products and Steel Fletcher Wood Panels – Sales revenue increased by 4% – EBIT sharply down (halved) – High resin costs, increased transport costs and falling MDF prices main contributors 5
Slide 8: Building Products and Steel: Fletcher Aluminium
Building Products and Steel Fletcher Aluminium – Sales revenue declined by 8% and EBIT in loss – New door and window suite launched in October 2000 – Hamilton plant sold and production shifted to one site – Fletcher Aluminium Centres sold in July 2001 6
Slide 9: Building Products and Steel: Scott Panel and Hardware
Building Products and Steel Scott Panel and Hardware – Revenue and EBIT maintained – Growth in Auckland 7
Slide 10: Building Products and Steel: Steel Manufacturing
Building Products and Steel Steel Manufacturing – Sales volumes increased by 11% to 179,000 tonnes at Pacific Steel, with export volumes at 31% of total – Domestic prices remained weak – Power costs a real issue – Falling profitability through lower margins – Sims performance excellent 8
Slide 11: Building Products and Steel: Steel Processing and Distribution
Building Products and Steel Steel Processing and Distribution – Sales volumes from EasySteel increased 4% – Sales revenues down in all other business units, particularly Pacific Coilcoaters due to export sales 30% less than previous year – EBIT for processing and distribution significantly lower tha
Slide 12: Distribution Results
Distribution Results $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Gross Revenue 175 636 666 (includes Joint Ventures) FBL Revenue 45 171 223 EBIT 4 6 8 Funds 56 56 70 Return on Funds 26.5% 10.7% 11.4% 10
Slide 13: Distribution
Distribution • Sales levels at 95% of previous year in difficult residential market • Margins have improved across stores as a result of initiatives underway • Stronger results in last quarter of the year • Significant cash generated from reduction in funds 11
Slide 14: Concrete Results
Concrete Results $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Revenue 142 454 438 EBIT Before Unusuals 15 31 56 Funds 403 403 480 Return on Funds 14% 8% 12% 12
Slide 15: Concrete: Golden Bay and Winstone Aggregates
Concrete Golden Bay – Record domestic cement sales volumes despite weaker demand in Auckland – EBIT maintained Winstone Aggregates – EBIT improved significantly in the second half. Lower cash costs of production since March 13
Slide 16: Concrete: Firth and Stresscrete
Concrete Firth – Firth product volumes were constant but higher transport and marketing costs were incurred – EBIT halved Stresscrete – Stresscrete results were unsatisfactory but they have made significant progress in improving operating performance 14
Slide 17: Concrete: Humes and South America
Concrete Humes – A decline of 20-30% in infrastructure and pipeline activity in the North Island adversely impacted Humes earnings by 50% South America – Weak market conditions in Peru and Bolivia impacted the South American result – Losses in the order of $16 million cf $11 million pcp – Carrying v
Slide 18: Construction / Residential / Property Results
Construction / Residential / Property Results $m 2001 2001 2000 3 Mths 12 Mths 12 Mths Revenue 277 808 858 EBIT 9 5 18 Funds -62 -62 29 16
Slide 19: Construction / Residential / Property: Construction
Construction / Residential / Property Construction – Construction recorded positive earnings. New Zealand operations remained strong. – The Victorian Co-generation dispute was settled. The plant is performing ahead of expectations – Post 30 June the Manapouri claim was settled, in line with expectat
Slide 20: Construction / Residential / Property: Property and Residential
Construction / Residential / Property Property – Surplus property sales generated $18 million of cashflow during the year Residential – Fletcher Residential’s sales volume and margins contracted with the residential housing sector in New Zealand. Funds employed were reduced by $14 million to $30 mil
Slide 21: Profit After Tax
Profit After Tax $m 2001 2001 2000 3 Mths 12 Mths 12 Mths EBIT before Unusuals 42 94 170 Interest -9 -36 -34 Tax -10 -23 -31 Minority Interests -1 -1 1 NPAT before Unusuals 22 34 106 Adjustments Net of Tax -3 -306 -43 Profit After Tax 19 -272 63 19
Slide 22: Adjustments
Adjustments $m 2001 2001 2000 3 Mths 12 Mths 12 Mths i. Unusual Items Permanent Impairment -1 -101 -10 Other Losses -37 -30 Restructuring and Separation Costs -4 -43 -3 -5 -181 -43 ii. Taxation -2 -125 Total Adjustments -3 -306 -43 20
Slide 23: Simplified Balance Sheet
Simplified Balance Sheet Pro Forma June 2001 June 2000 NZ$m NZ$m Assets Current Assets 639 750 Fixed Assets 759 712 Provision for Deferred Taxation 136 359 Investments 90 86 Total Fletcher Building Assets 1,624 1,907 Liabilities Current Liabilities 560 453 Net Debt 274 485 Total Fletcher Building Li
Slide 24: Revaluation
Revaluation Revaluation Increases: $m Land 10 Buildings 8 Plant and Machinery 73 91 Less Deferred Taxation Liability 18 Increase in Equity 73 22
Slide 25: Ratios
Ratios 2001 2001 2000 3 Mths 12 Mths 12 Mths Net Debt / Equity 35% 35% 50% EBITDA / Interest 7.4 5.1 7.4 Dividend 12 cps 12 cps 16 cps Payout Ratio 66%* 240% 58% * Annualised 23
Slide 26: Divestments
NZ$ Millions 0.0 100.0 200.0 300.0 400.0 500.0 600.0 Jun-00 485 Cash from Ops (251) Capex 146 Divestments (31) (59) Issue Cap notes Net Debt Movement Divs 77 Sale tax loss (99) FX 6 Jun-01 274 24
Slide 27: Operational & Strategic Update
Operational & Strategic Update
Slide 28: Organisation (pre March 2001)
Organisation (pre 23 March 2001) Michael Andrews Construction / Steel / Concrete & Building Property & Housing Dry Wall Solutions Distribution / Infrastructure Products South America M. Binns N. Gunn K. Howard J. Illingsworth W. Roest 25
Slide 29: Organisation (Interim post March 2001)
Organisation (Interim post 23 March 2001) Michael Andrews Infrastructure Building Solutions Supply Chain Divestments Acting CFO Company Secretary & Marketing & Tax Manager (M. Binns) (A. Reding) (N. Gunn) (K. Howard) (W. Roest) (M. Farrell) • Construction • Distribution • Solutions Strategy • Accoun
Slide 30: Organisation (Going Forward)
Organisation (Going Forward) Ralph Waters CEO Mark Binns Mark Binns Andrew Reding TBA Chief Executive Chief Executive Chief Executive Chief Executive CONSTRUCTION CONCRETE BUILDING PRODUCTS DISTRIBUTION GROUP GROUP & STEEL GROUP GROUP • NZ Construction • Golden Bay Cement • Fletcher Wood Panels • Pl
Slide 31: Core Businesses Review
Core Businesses Review Core Non-Core????* PlaceMakers Hire-A-Hubby Building Depot Winstone Wallboards Plyco Doors Fletcher Wood Panels Fletcher Aluminium Scott Panel & Hardware EasySteel Steel Manufacturing/Processing Pacific Coilcoaters Cyclone Dimond Reinforcing CSP Galvanising Pacific Wire Backbo
Slide 32: Core Businesses Review (Cont.)
Core Businesses Review (Cont.) Core Non-Core????* New Zealand Construction Australian Construction South Pacific Construction Residential Co-Generation All excess property Penrose Head Office * Note: Non-Core???? are businesses that may not be relevant to Fletcher Building because of size, industry
Slide 33: Operational Initiatives
Operational Initiatives • Performance Improvement Project in PlaceMakers • Major capital investment in Golden Bay Cement – improved running costs – lower carbon emissions • Best ever backlog in New Zealand Construction and Australian Construction trading profitability • New electricity hedge contrac
Slide 34: Outlook
Outlook • Operational performance the highest priority • Steel Manufacturing and South America are the restructuring priorities • Introduce strategic planning process through which new initiatives will be evaluated • EBITDA for H1 should be comfortably ahead of pcp 31 1