- Release Date: 17/11/15 10:16
- Summary: ADDRESS: FBU: ASM presentation 17 November 2015
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FBU 17/11/2015 10:16 ADDRESS NOT PRICE SENSITIVE REL: 1016 HRS Fletcher Building Limited ADDRESS: FBU: ASM presentation 17 November 2015 2015 Annual Shareholders' Meeting 17 November 2015 Fletcher Building Limited 2015 Annual Shareholders' Meeting 17 November 2015 Fletcher Building Limited Sir Ralph NorrisChairman Heavy Building Materials WINSTONE AGGREGATES Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Sir Ralph NorrisChairman Heavy Building Materials WINSTONE AGGREGATES Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Directors Sir Ralph Norris (Chairman) Tony Carter Dr Alan Jackson John Judge Mark Adamson (Managing Director) Kathryn Spargo Cecilia Tarrant Steve Vamos 3 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Meeting Agenda Chairman's address o Overview of 2015 financial performance o Outcome of strategic review Chief Executive Officer's address o 2015 Operational review o Update on strategic priorities Trading and financial outlook General business Voting on resolutions 4 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Net earnings before significant items rose 10% Net earnings $270m 20% Net earnings $399m 10% (before significant items) 5 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Operating earnings before significant items Operating earnings $653m 5% (before significant items) oOperating earnings before significant items up 5% oWithin guidance range of $650m -$690m 6 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Significant items SIGNIFICANT ITEMS Goodwill impairment $78m Site closures $65m Disposal of businesses $7m Total $150m $126m of significant items non-cash 7 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Cashflow from operations increased by 18% Cashflow from operations $575m 18% oCashflow from operations $575m an increase of $86m from FY14 ($489m) oIncrease is due to: -Growth in operating earnings -Reduced working capital requirements 8 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 New Zealand operating earnings up 24% on prior year EBIT ? NZ$ m 362 449 New Zealand 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 9 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 New Zealand residential consents up 8% Total residential consents ? 35,000 Peak (2004) 30,000 25,000 20,000 15,000 10,000 Long term average (2001-2015) Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Source: Statistics NZ, Infometrics 1 - Twelve months rolling 10Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Growth in residential consents driven byAuckland region Change % year on year Auckland Canterbury Rest of NZ NZ 21 4 2 8 0% 5% 10% 15% 20% 25% Source: Statistics NZ, 12 months to June 2015 11 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Australian operating earnings down 30% EBIT ? NZ$ m 171 119 Australia 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 12 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Rest of World operating earnings fell by 7% EBIT ? NZ$ m 91 85 Rest of the World 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 13 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Dividend DIVIDEND Dividend per share 37c 3% Final dividend per share 19 cents Total dividend for the year 37 cents Dividend Policy: Target pay-out range of 50 to 75% of Net Earnings 14 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Total shareholder return - average of 17% p.a. over past 3 years Percentage 51 14 9 Jun-11 Jun-13 Jun-14 Jun-15 -3 -27 Jun-12 15 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Maintaining a strong balance sheet Debt/Debt Plus Equity Percentage 34 37 33 32 32 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 oGearing target range of net debt to net debt plus equity of 30 to 40% 16Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Health and safety performance Total recordable injury frequency rate* 11.10 8.50 6.80 6.00 6.40 2011 2012 2013 2014 2015 * Total injuries per million employee and contractor hours 17 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Progress on strategic priorities oReview of business portfolio: divestment of Rocla Quarry Products announced in August oIdentification of a number of opportunities to grow organically: - NZ residential development business - Construction in NZ and South Pacific - Trade Distribution in NZ and Australia 18 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Management changes Dean Fradgley Francisco Irazusta John Bell Matt Crockett CE, Distribution CE, Light Building Chief Information CE, Heavy Building NZ & Australia Products Officer Products 19 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Mark Adamson Chief Executive Officer Construction INFRASTRUCTURE Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Mark Adamson Chief Executive Officer Construction INFRASTRUCTURE Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Full year highlights: New Zealand Volume Growth oNZ Cement 9% oNZ Concrete Products 7% oNZ Concrete 14% oNZ Steel Distribution 17% oNZ Steel Reinforcing 20% oPlasterboard 7% oWindows & Doors 11% Golden Bay Cement, Auckland 21 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Full year highlights: Canterbury Progress oOver 65,000 permanent repairs completed oExtension of home repairs programme for a further 12 months from April 2015 Proposed masterplan illustration, Christchurch 22 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Full year highlights: Residential & Construction oHomes sold 35% oConcluded 3 development partnerships in Christchurch oConstruction: awarded $1.4bn of new contracts during the year NZ International Convention Centre 23 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Full year results: Australia oIplex impacted by loss of coal seam gas pipe volumes oInsulation volumes 22% oLaminex Operating Earnings 30% Laminex 24 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Full year highlights: FBUnite Further Progress o $50m of benefits delivered in total to 30 June 2015 -Procurement $35m Innovation -Property $10m People and growth -Financial shared services $5m o Operational excellence initiatives are expected to offset annual inflation, Performance Efficiency estimate $50m p.a. excellence 25 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 We are focused on 4 strategic priorities People: Create a great place to work Customers: Deliver what they value Efficiency: Work smarter together Profitable growth: Invest where we can win 26 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 People: Create a great place to work Organisational Design Leadership Talent Culture People: Create a great place to work Organisational Design Leadership Talent Culture o Simplified organisation structure: fewer, larger business units o Delivered a learning curriculum to over 7,000 employees globally o Talent regeneration has created strong succession pool for leadership roles o Women in leadership - a 73% increase in female GM's since 2012 o Annual employee engagement survey completed by over 17,000 staff 27 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Vision and values launched in 2015 28 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Customer: Deliver what they value Customer: Deliver what they value oFocusing on providing complete, end-to-end solutions oProduct innovation a key growth driver oIncreased use of online tools for pre-purchase decisions & custom design oSales and marketing excellence programme 29 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Efficiency: Work smarter together Efficiency: Work smarter together oFBUnite programme established core capabilities oManagement has scoped out the potential of each business unit oExternal diagnostic "top-down" assessment undertaken oIdentified further opportunities to drive value from the core oProgramme will exceed the $100m in benefits originally in scope with FBUnite 30 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Profitable growth: Residential Profitable growth: Residential oRecord year with operating earnings of $66m oGoal is to increase new homes sold to 1,500 p.a. over next few years oIncreasing focus on master planned community with mix of apartments, terrace and standalone houses oExpect to invest $160m (net) in land purchases in FY16 Stonefields Greenhithe 31 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Profitable growth: Construction Profitable growth: Construction oNumber of new contracts secured, with a contracted order book now standing at $3.4 billion Cancer Treatment Centre, Tauranga Sir John Guise Stadium, PNG 32 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Profitable growth: Distribution Profitable growth: Distribution oPlaceMakers achieved record retained earnings oMico plumbing & bathrooms: loss making 2 years ago, strongly profitable this year oExcellent progress in lifting performance in Tradelink oGrowth from customer solutions focus and expanded product ranges oInvestment in online and omni-channel platforms 33 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Sir Ralph NorrisChairman Heavy Building Materials WINSTONE AGGREGATES Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Sir Ralph NorrisChairman Heavy Building Materials WINSTONE AGGREGATES Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Outlook FY16 New Zealand oResidential construction activity expected to continue at above average levels oNet migration and Auckland housing demand key drivers oCommercial construction should track the upward trend in consents oGovernment infrastructure spending expected to remain at current levels Australia oResidential activity may slow from recent peak levels especially in the multi-dwelling segment oNon-residential expected to remain subdued, especially mining, resources and infrastructure sectors 35 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Outlook FY16 North America oActivity levels in residential and commercial should remain broadly consistent with prior year Europe oContinued mixed conditions expected with a weak economic outlook Asia oFurther growth in South-East Asia, China to likely remain highly competitive 36 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 Financial Outlook oEarnings before interest, tax and significant items expected to be in the range of $650 million to $690 million oFirst half earnings likely to be lower than the prior corresponding period due to: - Timing of construction earnings recognition - Lower residential earnings, and - Restructuring costs in Formica Europe and Tradelink 37 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 General Business 38 Fletcher Building Annual Shareholders' Meeting | (C) November 2015 2015 Annual Shareholders' Meeting 17 November 2015 Fletcher Building Limited 2015 Annual Shareholders' Meeting 17 November 2015 Fletcher Building Limited End CA:00273549 For:FBU Type:ADDRESS Time:2015-11-17 10:16:55
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