Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (March 2005)
41 slides from Fletcher Building's investor presentation, March 2005
Slide 1: Forsyth Barr Retail Investors Presentation
Forsyth Barr Retail Investors Presentation March 2005 Ralph Waters Chief Executive Officer Ralph Waters 11 August 2004 Chief Executive Officer
Slide 2: Disclaimer
2 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
Slide 3: Fletcher Building
3 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 2005
Slide 4: Company Dimensions
4 Company Dimensions Revenue: NZ$5.0 billion (including Amatek) Market cap: >NZ$3.2 billion No.3 on NZX Employees: Over 14,000 (including Amatek) Shares: 462 million Daily average turnover ≈1,500,000 Shareholders: NZ 47% Aust 30% USA 13% Other 10% March 2005
Slide 5: What is Fletcher Building?
5 What is Fletcher Building? Earnings Make Up Building Construction Materials Distribution 10% 15% 75% Not a construction company Not a distribution business A building materials manufacturer with two special channels to market March 2005
Slide 6: Why Like This?
6 Why Like This? No other similar companies that combine construction / manufacturing / distribution NZ market size too small for normal distribution methods and thus PlaceMakers – a composite distributor for FB and others Construction an important channel that also provides high returns m
Slide 7: The Fletcher Building Value Chain Delivers High Returns
7 The Fletcher Building Value Chain Delivers High Returns Laminates Building Other & Concrete Products Manufacturers Panels Dedicated Shared Other Distribution Distribution Construction Distribution Markets Markets March 2005
Slide 8: Fletcher Building product range
8 Tasman sarking overlay Pynefloor® particleboard flooring Plyco doors Fletcher Steel Tasman Dimond or AHI roofing structural steel I beams insulation Laminex high pressure laminates Tasman house wrap Oliveri sinks Firth bricks Firth concrete Gib® and pavers blocks plasterboard Fletcher Aluminium La
Slide 9: Infrastructure - Concrete
9 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 60% of NZ pre cast market 30% NSW and 80% of WA sand market March 2005
Slide 10: Infrastructure - Construction
10 Infrastructure - Construction New Zealand’s leading construction company Commercial (Buildings) Engineering (Infrastructure) South Pacific (General) Residential (NZ largest home builder) March 2005
Slide 11: Building
11 m7, March 2005 Building
Slide 12: March 2005
12 March 2005
Slide 13: Building Products
13 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 Australasia (also facility in California) No.2 in Australasia No.1 in Australasia March 2005
Slide 14: Building Products - Steel
14 Building Products - Steel 50% of Sims (scrap metal) Sole producer of long products in NZ 250,000 EAF steel mill (rod, bar & wire) General steel distribution 30% Australia & NZ rollforming market 50% of flat steel painting in NZ March 2005
Slide 15: Laminates & Panels
15 Laminates & Panels HPL (2 mills) No.1 Australasia Decorated Board No.1 Australasia MDF (3 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 2005
Slide 16: Distribution
16 Distribution 54 PlaceMakers stores in NZ 35% of building materials market Joint Venture rather than franchise No.1 in segment Trade focus – 80% of sales March 2005
Slide 17: Strategic Agenda
17 Strategic Agenda Earnings Reliability Internal Growth External Growth March 2005
Slide 18: Acquisition Criteria
18 Acquisition Criteria No. 1 or No. 2 in industry Good industry structure No damaging competitive response Good management in place and staying on EVA positive within two years March 2005
Slide 19: Acquisitions
19 Acquisitions 2002 Laminex NZ$780 million 2003 Tasman NZ$260 million 2005 Amatek NZ$590 million March 2005
Slide 20: A Broader Revenue Base
20 A Broader Revenue Base 2004 Year Annualised Adjusted for 12 months Amatek Other Other Australia 4% 4% 25% Australia 35% New New Zealand Zealand 61% 71% March 2005
Slide 21: Laminex – (complementary)
21 Laminex – (complementary) Laminex Fletcher Building MDF Gympie, Perth MDF Taupo PB Dardenup PB Kumeu, Taupo HPL Melbourne Dist. Scott Panel HPL Papakura Dist. National March 2005
Slide 22: Tasman – (new)
22 Tasman – (new) Fibre glass insulation Sydney, Auckland & Christchurch Metal roof tiles Auckland & Los Angeles Stainless steel sinks Adelaide Access floors Australia March 2005
Slide 23: Amatek – (complementary)
23 Amatek – (complementary) Building Products Infrastructure Existing FBU Brands Amatek Brands Existing FBU Brands Amatek Brands March 2005
Slide 24: Strong track record of earnings growth expected to continue
24 Strong track record of earnings growth expected to continue Amatek Years ended 30 June A$m 20031 20041 2005(E)2 External sales 659 743 808 EBITDA 3 60 77 86 EBITA 41 59 64 Notes: 1. Combined normalised results for Rocla Pipeline Products, Rocla Quarry Products, Stramit and Insulation Solutions as
Slide 25: Estimated synergies and growth opportunities
25 Estimated synergies and growth opportunities Synergies Identified growth opportunities Total synergies estimated at Rocla Pipeline Products A$10m p.a. – New products under development – A$4m p.a. immediately from – Concrete sleeper demand through corporate cost savings railroad upgrades – Fur
Slide 26: Attractive Acquisition Valuation Metrics
26 Attractive Acquisition Valuation Metrics 2005 2005 A$m Estimate Adjusted 1 Purchase Price 2 530 470 Amatek EBITDA 3 86 86 EV / EBITDA multiple (pre synergies) 6.2x 5.5x EV / EBITDA multiple (post synergies) 4 5.5x 4.9x Notes: 1. Adjusted to exclude future tax benefits acquired (at the estimated d
Slide 27: Internal Growth Opportunities
27 Internal Growth Opportunities Lifting capacity in a number of business units Cement R.M.C. Aggregates Roof Tiles Insulation Steel Particle Board & MDF March 2005
Slide 28: Earnings
28 Earnings Net Earnings $m 300 240 168 161 200 93 100 0 Jun 02 Jun 03 Jun 04 Dec 04 March 2005
Slide 29: Total Shareholder Return
29 Total Shareholder Return* % 60 50 43 50 33 40 24 30 20 10 0 Jun 02 Jun 03 Jun 04 Dec 04 * TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) March 2005
Slide 30: Performance Measurement - Return on Average Equity
30 Performance Measurement Return on Average Equity* 28.1 % 30 24.3 23.0 16.9 20 10 0 Jun 02 Jun 03 Jun 04 Dec 04 * Net earnings/shareholders funds March 2005
Slide 31: Performance Measurement - Return on Average Funds
31 Performance Measurement Return on Average Funds* % 40 30.3 30 23.1 24.4 24.7 20 10 0 Jun 02 Jun 03 Jun 04 Dec 04 * EBIT/(Average net debt + equity + capital notes) – deferred tax asset March 2005
Slide 32: Performance Measurement - Economic Value Added
32 Performance Measurement Economic Value Added $m 180 200 139 150 100 65 46 50 0 Jun 02 Jun 03 Jun 04 Dec 04 March 2005
Slide 33: Dividends
33 Dividends 2002 2003 2004 2005 (1st half) 14c 19c 25c 15c March 2005
Slide 34: Simplified Balance Sheet
34 Simplified Balance Sheet Dec Jun 2004 2004 NZ$m NZ$m Assets Current Assets 1182 1022 Fixed Assets 1048 1023 Intangibles & Goodwill 334 342 Provision for Deferred Taxation 83 86 Investments 163 159 Total Fletcher Building Assets 2810 2632 Liabilities Current Liabilities 810 666 Net Debt 374 448 Ca
Slide 35: Key Ratios
35 Key Ratios Debt/Debt Plus Equity % 80 70 60 53.2 49.2 49.9 48.4 47.2 50 40.2 43.1 38.7 40 30 20 10 0 Jun Dec Jun Dec Jun Dec Jun Dec 01 01 02 02 03 03 04 04 March 2005
Slide 36: What does the future hold?
36 What does the future hold? March 2005
Slide 37: New Zealand Value of Work Commenced
37 New Zealand Value of Work Commenced NZ$ million Forecast 16000 +9% +2% -3% 14000 +14% Infrastructure +9% +8% 12000 10000 +17% Non 8000 +8% +2% Residential 0% 6000 0% -2% A&A 4000 +2% -17% -3% Residential 2000 0 97 98 99 00 01 02 03 04 05 06 07 Source : Infometrics March 2005
Slide 38: Australia Value of Work Commenced
38 Australia Value of Work Commenced Forecast 60 50 +6.9% -6.1% - 1.7% 40 A$Billion 30 20 10 2005f 2006f 2007f 2001 2003 2004 2000 2002 1995 1999 1996 1997 1998 Dwelling (Incl A&A) Non-Dwelling Source : BIS Shrapnel Building in Australia December 2004 Update March 2005
Slide 39: Exceptional management team supporting CEO
39 Exceptional management team supporting CEO Good internal capacity upgrades No problem businesses to be dealt with Large cash generation March 2005
Slide 40: Australasia's first choice building materials investment
40 That is why Fletcher Building is fast becoming Australasia’s first choice building materials investment March 2005
Slide 41: Ralph Waters, Chief Executive Officer
Ralph Waters 11 August 2004 Chief Executive Officer
Fletcher Building — Investor Presentation (March 2005) on 6ix