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Annual Shareholders Meeting 11 November 2009
Fletcher Building Limited 2009 Annual Shareholders Meeting
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Annual Shareholders Meeting 11 November 2009
Dr Roderick Deane Chairman
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Fletcher Building Limited 2009 Annual Shareholders Meeting Annual - - PowerPoint PPT Presentation
Fletcher Building Limited 2009 Annual Shareholders Meeting Annual - - PowerPoint PPT Presentation
1 Fletcher Building Limited 2009 Annual Shareholders Meeting Annual Shareholders Meeting 11 November 2009 2 Dr Roderick Deane Chairman Annual Shareholders Meeting 11 November 2009 3 3 Directors Dr Roderick Deane (Chairman) Hugh
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Annual Shareholders Meeting 11 November 2009
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Directors
- Dr Roderick Deane (Chairman)
- Hugh Fletcher
- Dr Alan Jackson
- John Judge
- Jonathan Ling (Managing Director)
- Sir Dryden Spring
- Gene Tilbrook
- Kerrin Vautier
- Ralph Waters
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Annual Shareholders Meeting 11 November 2009
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Meeting agenda
- Chairman’s overview
- One hundred years of Fletcher in New Zealand
- Chief Executive Officer’s address
- Trading outlook
- Shareholder questions and discussion
- Consideration of, and voting on, the resolutions of the meeting
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Annual Shareholders Meeting 11 November 2009
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Overview remarks
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Annual Shareholders Meeting 11 November 2009
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Sales
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NZ$m
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Annual Shareholders Meeting 11 November 2009
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Net earnings before unusual items
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NZ$m
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Cashflow from operations
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NZ$m
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Return on average funds
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Percentage
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Annual Shareholders Meeting 11 November 2009
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Dividends
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Cents per share
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Annual Shareholders Meeting 11 November 2009
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Total shareholder return
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Percentage
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Annual Shareholders Meeting 11 November 2009
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Fletcher Building relative share price performance
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140 120 100 80 60 40 20 07/ 08 08/ 08 09/ 08 10/ 08 11/ 08 12/ 08 01/ 09 02/ 09 03/ 09 04/ 09 05/ 09 06/ 09
Fletcher Building Boral CSR James Hardie
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Annual Shareholders Meeting 11 November 2009
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Unusual items: proactively re-sizing the business
Redundancy and restructuring costs: $43 million (after tax)
- labour reduction of 2,500 to 16,500 across the group
Capacity reduction initiatives: $100 million (after tax)
- closure of Laminex particleboard and MDF plants
- reduction in Formica European capacity
- Formica streamlined product portfolio
Adjustments to asset carrying values: $157 million (after tax)
- reduction in goodwill for Formica: $56 million
- impairment of fixed assets in Formica: $65 million
- other assets: $36 million
Tax benefit recognition: $60 million of tax losses written down
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Balance sheet strengthened with equity raising
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Debt / debt plus equity Percentage
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Annual Shareholders Meeting 11 November 2009
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Changes to the board
Directors retired during the year as part of planned succession arrangements:
- Paul Baines
- Geoff McGrath
Two new directors appointed:
- Alan Jackson
- Gene Tilbrook
Roderick Deane to retire as chairman on 31 March 2010; it is the current intention that Ralph Waters be appointed chairman
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Annual Shareholders Meeting 11 November 2009
Hugh Fletcher Director
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Annual Shareholders Meeting 11 November 2009
Jonathan Ling Chief Executive Officer
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131 40 255 18 159 175 171 82 296 80 214 123
Strong performance in Steel, other businesses typically had lower volumes and margins
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1 Earnings before interest, tax, depreciation and am ortisation, and unusual items
EBITDA NZ$m illion
1
12 months ended June 2009 June 2008 Distribution Building Products Infrastructure Property Laminates & Panels Steel
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Annual Shareholders Meeting 11 November 2009
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Residential construction activity was significantly lower in all key markets
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Building Consents Jun 20 0 9 12 m onths Jun 20 0 8 12 m onths Jun 20 0 7 12 m onths 0 9/ 0 8 % Mvm t New Zealand 12,503 20,902 23,344
- 40
Australia 132,073 162,732 153,400
- 19
US
1
565,000 859,000 1,389,000
- 34
England
2
71,480 139,880 155,240
- 49
Spain
3
68,116 147,426 231,136
- 54
1 Years to Decem ber. 2009 forecast provided by McGraw Hill, includes single and m ulti-fam ily dw ellings 2 England figure for 2009 is provisional 3 12 m onths ended 31 May. Excludes m ulti-unit developm ents
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Annual Shareholders Meeting 11 November 2009
Building Products result
- Plasterboard performance
impacted by low NZ housing starts.
- Insulation in NZ & Australia
benefited from stimulus packages in second half.
- Metal Roof Tiles
Strong growth in international sales offset by weak NZ market and high steel prices.
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NZ$m Jun 0 9 12m ths Jun 0 8 12m ths % ∆ Sales 771 739 +4 EBITDA
1
131 171
- 23
EBIT
1
106 148
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Funds Employed 644 631 +2 ROFE % 16.5 23.5
1 Excluding unusual item s
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Annual Shareholders Meeting 11 November 2009
Distribution result
- Sales impacted by weak NZ
housing starts but market share maintained.
- Significant staff reductions
implemented.
- Frame and truss
manufacturing activities consolidated.
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NZ$m Jun 0 9 12m ths Jun 0 8 12m ths % ∆ Sales 883 1,083
- 18
EBITDA
1
40 82
- 51
EBIT
1
30 73
- 59
Funds Employed 144 185
- 22
ROFE % 20.8 39.5
1 Excluding unusual item s
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Annual Shareholders Meeting 11 November 2009
Infrastructure result
NZ Concrete
- Volume declines in cement,
aggregates, readymix, masonry and concrete pipe.
- Reflects weaker residential &
commercial construction markets
- nly partly offset by infrastructure
activity. Australia Concrete
- Good volume growth in quarry
volumes and non-pipe concrete products. Construction
- Strong growth in infrastructure
work, commercial activity weaker.
- Backlog $1.2 billion
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NZ$m Jun 0 9 12m ths Jun 0 8 12m ths % ∆ Sales 2,052 1,857 +11 EBITDA
1
- Concrete NZ
- Concrete Aust.
- Construction
- Property
125 78 52 18 174 72 50 80
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+8 +4
- 78
Total EBITDA 273 376
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EBIT
1
203 308
- 34
Funds Employed 1,042 1,027 +1 ROFE % 19.5 30.0
1 Excluding unusual item s
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Annual Shareholders Meeting 11 November 2009
Laminates & Panels result
Lam inex
- Volumes down in NZ and
Australia, export markets weak.
- Significant input cost increases
in first half Form ica
- Strong performance in Asia.
US and European markets significantly weaker.
- Prices remained firm and
input cost pressures eased in second half.
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1 Excluding unusual item s
NZ$m Jun 0 9 12m ths Jun 0 8 12m ths % ∆ Sales 2,052 1,857 +11 EBITDA
- Laminex
- Formica
99 60 166 48
- 40
+25 Total EBITDA
1
159 214
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EBIT
1
74 141
- 47
Funds Employed 1,832 2,094
- 13
ROFE % 4.0 6.7
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Formica growth in Asia and North America turnaround boosted result, but Europe weak
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EBITDA NZ$m
1
2H0 9 1H0 9 2H0 8 1H0 8 Asia 19 20 14 16 North America 17 2
- 17
10 Europe 8 9 30 22 Corporate
- 9
- 6
- 17
- 10
Reported EBITDA (NZ$) 35 25 10 38
1 Before unusual items
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Annual Shareholders Meeting 11 November 2009
Steel result
- Strong result in first half
reflected high steel prices and strong demand.
- Second half sales 30% lower
than first half.
- Continued strong demand
from infrastructure-related projects.
- Rollforming volumes lower
due to weaker residential and light commercial markets.
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NZ$m Jun 0 9 12m ths Jun 0 8 12m ths % ∆ Sales 1,321 1,279 +3 EBITDA
1
175 123 +42 EBIT
1
154 101 +52 Funds Employed 562 589
- 5
ROFE % 27.4 17.1
1 Excluding unusual item s
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Health and safety
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Current operating climate
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- No significant pick up in activity across the group
- Overall volumes are generally stable except for:
– insulation in Australia and New Zealand – international markets for metal roof tiles
- Commercial building recovery will require improvement in broader
economy and increased bank capacity
- Increased infrastructure spending by government continues to be a
positive factor
- Cautious about the immediate outlook and timing/ pace of a
recovery
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Positioned for the future
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No significant debt refinancing until 2013
75 68 59 75 112 40 19 20 57 120 144 298 164 202
- 5
9
- 100
100 200 300 400 NZ$ millions
Funding and Maturity Profile
JuneYears Capital Notes Debt - Drawn
2011 2012 2010 2013 2014 2015 2016 2017 2018 2019 2020
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Upturn Plans
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Strategy
Longer term strategy continues to be:
- improve earnings reliability
- maintain and improve internal capabilities
- pursue acquisition opportunities where these meet key investment criteria
Our aspirations by geography:
New Zealand Maintain and extend domestic businesses, strengthen channels to market. Australia Create the leading Australasian building products and construction materials business by establishing strong market positions. International Develop existing operations into the world’s leading laminates and panels business.
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Annual Shareholders Meeting 11 November 2009
Dr Roderick Deane Chairman
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Market outlook 2010
- Subdued outlook for FY10 with low activity levels expected in most
markets.
- Infrastructure spending in NZ and Australia will assist construction,
concrete and steel businesses.
- Weak residential and commercial building activity will impact
results; Insulation will benefit from government stimulus package.
- Asia expected to continue growth overall, Europe expected to remain
weak, North American volumes expected to be stable at low levels.
- Continued focus on achieving operational efficiencies and cost
control given lower volumes.
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Performance outlook
- Current range of analysts’ forecast net earnings excluding unusual
items for FY 2010 is NZ$261 million to $340 million
- Based on current trading performance net earnings should fall within
this range provided no further deterioration in key markets
- Without a sustained recovery in volumes, earnings will likely be at
the lower end of the range
- Current intention is to maintain the dividend at 14.0 cents per share for each
half year. Final decision dependent on financial outcome for the year
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Annual Shareholders Meeting 11 November 2009
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