half year results to 31 december 2016 - fletcher building · working with you half year results to...
TRANSCRIPT
Working with you
Half Year Resultsto 31 December 2016
Fletcher BuildingHalf Year Results Presentation 2017
MARK ADAMSON— Chief Executive Officer
BEVAN MCKENZIE— Chief Financial Officer
22 February 2017
1
Disclaimer
Fletcher Building Half Year Results Presentation | © February 20172
This Half Year Results presentation dated 22 February 2017 provides additional comment on the management commentary 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 commentary.
Contents
• Results Overview
• Industry Context
• Divisional Performances
• Financial Results
• Strategy Update
• Outlook
• Appendix
Fletcher Building Half Year Results Presentation | © February 20173
Working with you
Results Overview
Fletcher Building Half Year Results Presentation 2017
Results overview
Fletcher Building Half Year Results Presentation | © February 20175
Operating earnings before significant items
$310m12%
Net earnings before significant items
$187m18%
Revenue
$4,613m4%
Dividend per share
20c5 %
Basic earnings per share before significant items
27.0c17%
Highlights
6
Distribution:• Total EBIT +31%• NZ Steel Distribution EBIT +47%• NZ Building Supplies EBIT +21%• AU Steel Distribution EBIT +25%• Strong NZ performance, AU improvements
International:• Total EBIT +32%• Formica EBIT +113%• Laminex EBIT +10%• Laminex performing well in both NZ and Australia• All Formica regions seeing positive momentum –
growth in local currencies was higher than reported NZD growth
Fletcher Building Half Year Results Presentation | © February 2017
Highlights
7
Good progress on business turnarounds & Higgins integration:• Formica Europe EBIT +$14m• Higgins EBIT $21m in first 5 months, ahead of plan• Iplex AU and Tradelink both ahead of HY 16
New Zealand:• Total EBIT1 (excluding Construction, divestments/
acquisitions) +20%• Volume improvements: Steel +14%, Plasterboard +9%,
Concrete Pipe +12%, Cement +5%, Ready Mix +4%• Residential and Land Development EBIT +25%• Construction result impacted by one-off factors• Corporate costs beginning to decline
Fletcher Building Half Year Results Presentation | © February 2017
1. Before significant items
Results overviewRevenue
Fletcher Building Half Year Results Presentation | © February 20178
• Reported revenue $179m or 4% higher than HY16
REVENUE GROWTH RATESGeographic segments Reported Local Currency
New Zealand 14% 14%
Australia (10)% (6)%
Rest of World 0% 8%
Revenue
$4,613m4%
Results overviewOperating earnings
Fletcher Building Half Year Results Presentation | © February 20179
Operating earnings
$294m2%
• Reported operating earnings (EBIT) up 2%
• Operating earnings before significant items up 12%• Significant items primarily due to site closure
costs at Fletcher Insulation and RoclaProducts
Operating earnings before significant items
$310m12%
EBIT (before significant items) GROWTH RATESGeographic segments Reported Local Currency
New Zealand 3% 3%
Australia (4)% 2%
Rest of World 121% 138%
Stronger performance from Rest of World reflected in increased EBIT contribution
Fletcher Building Half Year Results Presentation | © February 2017101. Before significant items
57%29%
14%
External Revenue Geographic Split H1 17
(H1 16 in brackets)
(14%)
(52%)(34%) 66%
17%
17%
EBIT¹ Geographic Split H1 17(H1 16 in brackets)
(9%)
(72%)
(19%)
Results overviewNet earnings
Fletcher Building Half Year Results Presentation | © February 201711
Net earnings
$176m2%
• Net earnings before significant items were up 18% to $187m
• Funding costs down 13%• Effective tax rate 25%, slightly higher
EARNINGS PER SHARE
Earnings per share 25.4 cents +2%Earnings per share(before significant items)
27.0 cents +17%
Net earnings before significant items
$187m18%
Results overviewCash flow from operations
Fletcher Building Half Year Results Presentation | © February 201712
Cashflow from operations
$(67)m
• Cash outflow from operations of $67m compared to $170m inflow in HY16
• Decrease mainly due to:– $56m Pacific Steel working
capital release in HY16 – $79m increased investment in
land and development– Timing of Construction contract
payments• Cashflow from operations before
working capital movements were $246m (versus $208m in HY 16)
Results overviewDividend
Fletcher Building Half Year Results Presentation | © February 201713
Dividend per share
20c5%
• Interim dividend fully imputed for NZ taxation purposes
• Dividend Reinvestment Plan will be operative for this dividend
• Expect to fully impute interim and final dividends in FY17, FY18 and FY19
DIVIDEND
Interim dividend per share 20 cents
Working with you
Industry Context
Fletcher Building Half Year Results Presentation 2017
New Zealand residential consents up 10%, supported by high net migration
15
Source: Statistics NZ, Infometrics1 – Twelve months rolling
-20,000
0
20,000
40,000
60,000
80,000
Jun-
04
Jun-
05
Jun-
06
Jun-
07
Jun-
08
Jun-
09
Jun-
10
Jun-
11
Jun-
12
Jun-
13
Jun-
14
Jun-
15
Jun-
16
Net migration 12 month rolling
Fletcher Building Half Year Results Presentation | © February 2017
Auckland represents 34% of all consents in the 12 months to December 16
-20,0000
20,00040,00060,00080,000
Dec
-03
Dec
-04
Dec
-05
Dec
-06
Dec
-07
Dec
-08
Dec
-09
Dec
-10
Dec
-11
Dec
-12
Dec
-13
Dec
-14
Dec
-15
Dec
-16
Net Migration 12 month rolling
10% 7%
-9%
24%
-20%
-10%
0%
10%
20%
30%
NZ Auckland Canterbury Rest of NZ
Change % Year on Year
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Dec
-10
Dec
-11
Dec
-12
Dec
-13
Dec
-14
Dec
-15
Dec
-16
Total residential consents1
Long term average (2001-2015)
Peak (2004)
New Zealand Infrastructure and Commercial backlog strong
Fletcher Building Half Year Results Presentation | © February 201716
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2010 2011 2012 2013 2014 2015 2016
Valu
e of
wor
k do
ne (N
Zm)
New Zealand Infrastructure and Commercial Work
Infrastructure Commercial
8%
21%
0%
5%
-5%
0%
5%
10%
15%
20%
25%
New Zealand Auckland Canterbury Rest of NewZealand
NZ Infrastructure and Commercial Work Put in Place Change Year-on-Year
Source: NZ Statistics, Infometrics – Calendar years Source: NZ Statistics, Infometrics – CY2016 growth on CY2015
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016
'000
s
Australian Residential Approvals
Standalone houses Other dwelling types
0
50
100
150
200
250
300
350
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Mig
ratio
n (0
00)
Net migration 12 month rolling
Australian residential activity impacted by WA, standalone approvals remain resilient
17Source: BIS – Calendar years
Fletcher Building Half Year Results Presentation | © February 2017
Net migration 12 month rolling
Australian Residential Approvals Change Year-on-Year*Australian Residential Approvals
-4%
2%
-3%
2%
-27%
4%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
Australia NSW VIC + QLD SA WA Rest of Aus
Source: BIS – Change from CY15 to CY16
Australian Infrastructure and Commercial work has slowed in most states
Fletcher Building Half Year Results Presentation | © February 201718
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Valu
e of
wor
k do
ne (A
UD
m)
Australian Infrastructure and Commercial Work
Infrastructure Non residentialSource: BIS Shrapnel
-11%
4%
-19%
1%
-15%
-4%
‐20%
‐15%
‐10%
‐5%
0%
5%
10%
Australia NSW VIC + QLD SA WA Rest of Aus
Australian Infrastructure and Commercial Work Change Year-on-Year 2016
Working with you
DivisionalPerformances
Fletcher Building Half Year Results Presentation 2017
19
Divisional operating earnings overview
Fletcher Building Half Year Results Presentation | © February 201720
EBIT¹NZ$m
132
5364
2436
(31)
129
7084
30 24
(27)
Building Products International Distribution Residential andLand
Development
Construction Corporate
HY 2016 HY 2017
1. Before significant items
(2)%
+32%+31%
+25% (33)%
+13%
+10% excluding divestments
278263
310
(15) 12
17
206 (12)
4
180
200
220
240
260
280
300
320
340
H1
16 A
ctua
l
Dis
cont
inue
d
H1
16 a
djus
ted
Bui
ldin
gP
rodu
cts
Inte
rnat
iona
l
Dis
tribu
tion
Res
iden
tial &
Land
Con
stru
ctio
n
Cor
pora
te
H1
17 re
porte
d
H1 2017 vs H1 2016 EBIT Bridge
Fletcher Building Half Year Results Presentation | © February 201721
EBIT¹NZ$m
1. Before significant items
Fletcher Building Half Year Results Presentation | © February 201722
Building ProductsResult
NZ$mDec 20156 months
Dec 20166 months
% change
Gross Revenue 1,265 1,108 (12)%
External Revenue 1,021 859 (16)%
EBITDA¹ 172 167 (3)%
EBIT¹ 132 129 (2)%Concrete Pipes & Products 27 26 (4)%Cement & Aggregates 35 38 9%
Building Materials 48 53 10%
Plastic Pipes 2 7 NMJoint Ventures & Other 5 5 0%
Divested businesses 15 0 NM
Funds Employed 1,748 1,686 (4)%
EBITDA¹/gross revenue % 14 15
EBIT¹/gross revenue % 10 12
ROFE % 15 15
Concrete Pipes & ProductsReady-mix concrete volumes +4%NZ concrete pipe volumes +12%Australia concrete product volumes flat
Cement & AggregatesNew Zealand cement volumes +5%New Zealand Aggregate volumes +24%
Building MaterialsPlasterboard volumes +9%
Plastic PipesIplex Australia volumes +2%EBIT +$5m
1. Before significant items
Fletcher Building Half Year Results Presentation | © February 201723
International Result
NZ$mDec 20156 months
Dec 20166 months
% change
Gross Revenue 1,080 1,005 (7)%
External Revenue 1,067 997 (7)%
EBITDA 87 104 20%
EBIT 53 70 32%
Formica 16 34 108%
Laminex 41 45 10%
Roof Tile Group 6 2 (67)%
Funds Employed 2,041 1,948 (5)%
EBITDA/gross revenue % 8 10
EBIT/gross revenue % 5 7
ROFE % 5 7
Formica3% volume growth in both North America & AsiaAsia revenue1 growth of +7%, operating earnings1 +4%Europe: operating earnings up $14m
LaminexRevenue growth in New Zealand +9%Underlying EBIT growth: – New Zealand +75%– Australia +3%
Roof Tile GroupRevenue down 7% and EBIT down $4m due mainly to sales decline in Africa
1. Local currency
DistributionResult
Fletcher Building Half Year Results Presentation | © February 201724
NZ$mDec 20156 months
Dec 20166 months
% change
Gross Revenue 1,610 1,644 2%
External Revenue 1,531 1,559 2%
EBITDA 79 96 22%
EBIT 64 84 31%
NZ Building Supplies 39 47 21%
NZ Steel Distribution 17 25 47%
AU Building Supplies 0 2 NM
AU Steel Distribution 8 10 25%
Funds Employed 1,049 1,039 (1)%
EBITDA/gross revenue % 5 6
EBIT/gross revenue % 4 5
ROFE % 12 16
New Zealand Building SuppliesOperating earnings +21%PlaceMakers revenue growth +7%Mico revenue growth +7%
New Zealand Steel DistributionOperating earnings +47% Significant volume growth at Pacific Coilcoaters, Easysteel and Reinforcing
Australia Building SuppliesRevenue flat in AUD due to weakness in Western and South AustraliaTradelink continues to focus on its core trade plumber customers16 new Tradelink stores opened in HY17
Australia Steel DistributionOperating earnings +25%New customer service proposition launched
Fletcher Building Half Year Results Presentation | © February 201725
Residential and Land DevelopmentResult
NZ$mDec 20156 months
Dec 20166 months
% change
Gross Revenue 108 163 51%
External Revenue 108 163 51%
EBITDA 24 30 25%
EBIT 24 30 25%
NZ Residential 24 25 4%
Land Development 0 5 NM
Funds Employed 295 477 62%
EBITDA/gross revenue % 22 18
EBIT/gross revenue % 22 18
ROFE % 16 13
NZ Residential Continued new developments coming onlineSolid sales in Beachlands, Karaka and HobsonvilleSignificant progress in securing land for future development over the next few yearsCurrent pipeline of over 4,000 lots
Land DevelopmentExpect to earn $25m+ per annum over the next 5 years from land developed for resale
Fletcher Building Half Year Results Presentation | © February 201726
ConstructionResult
NZ$mDec 20156 months
Dec 20166 months
% change
Gross Revenue 748 1,150 54%
External Revenue 707 1,035 46%
EBITDA 40 35 (13)%
EBIT 36 24 (33)%
Construction NZ1 26 1 (96)%
Construction South Pacific 10 23 141%
Funds Employed (37) 366 NM
EBITDA/gross revenue % 5 3
EBIT¹/gross revenue % 5 2
New ZealandRevenue +29% (excluding Higgins)Backlog of work as at 31 December 2016 was $2.7bnOperating earnings significantly impacted by:• Timing of major projects• Bid costs• Reduced contribution from Fletcher
EQR• Isolated underperformance in one area
of the businessHiggins ahead of plan and invited to join NCTIR consortium for rebuild of State Highway 1 post Kaikoura earthquake
South Pacific
EBIT +$13m
1. Includes Fletcher EQR
Working with you
Financial Results
Fletcher BuildingHalf Year Results Presentation 2017
Profit & Loss18% increase in net earnings before significant items
NZ$m (except EPS)
Reported Results
ChangeDec 20156months
Dec 20166months
Revenue 4,434 4,613 4%
Operating earnings before significant items 278 310 12%
Operating margin 6.3% 6.6% 5%
Significant items 10 (16) NM
Operating earnings (EBIT) 288 294 2%
Funding costs (60) (52) (13)%
Tax (52) (61) 17%
Non-controlling interests (4) (5) 25%
Net earnings 172 176 2%
Net earnings before significant items 159 187 18%
Earnings per share before significant items (EPS – cents) 23.0 27.0 17%
Fletcher Building Half Year Results Presentation | © February 201728
Operating cash flow
NZ$mDec 20156 months
Dec 20166 months Change
Operating earnings before significant items 278 310 12%
Depreciation and amortisation 97 102 5%
Less cash tax paid (67) (69) 3%
Less interest paid (60) (54) (10)%
Provisions, significant items and other (40) (43) 8%
Results from operations before working capital adjustments 208 246 18%
Land and developments (85) (164) 93%
Other working capital movements 47 (149) NM
Cash flows from operating activities 170 (67) NM
Fletcher Building Half Year Results Presentation | © February 201729
Capital expenditure in FY17 expected to be in the range of $275m to $325m
Fletcher Building Half Year Results Presentation | © February 201730
NZ$mDec 20156 months
Dec 20166 months
% change
Stay-in-business 77 69 (10)%
Growth 45 58 29%
Total Capex 122 127 4%
Acquisitions 305 NM
Depreciation/ Amortisation 97 102 5%
• Depreciation & Amortisation forecast to be $210-220m in FY17
173194
275
201 194210
2015 2016 2017
Growth
106325
2017 Forecast Capital
105
Stay-in-business
Depreciation
Expenditure
NZ$m
2017 Forecast Depreciation
220
Net debt higher due to investments in working capital, land and Higgins
Fletcher Building Half Year Results Presentation | © February 201731
149
164
5869
305
42 3 123
9
1,396
2,072
(31)2,041
(246)
Ope
ning
Net
Deb
t
Cas
h fr
om o
pera
tions
(pre
wor
king
cap
ital)
Oth
er w
orki
ng c
apita
l
Inve
stm
ent i
n la
ndan
d de
velo
pmen
ts
Gro
wth
cap
ex
Stay
in b
usin
ess
cape
x
Acq
uisi
tions
Fina
nce
leas
e ad
ditio
n
Trea
sury
sto
ck p
urch
ase
Div
iden
ds
Min
ority
dis
trib
utio
n
Clo
sing
net
deb
tbe
fore
hed
ging
/FX
Hed
ging
/FX
on d
ebt
Clo
sing
net
deb
t
NZ$m
Debt profile
Undrawn credit lines of $310m and cash of $229mAverage maturity of debt is 5.1 yearsApproximately 47% of all borrowings have fixed interest ratesAverage interest rate on debt is 5.0%Mix of currency (hedged)− NZ$ 50%− AU$ 33%− US$ 11%− Other 6%
Fletcher Building Half Year Results Presentation | © February 201732
173206
466
279
131164
148
377
246
10
300
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
June Years
Funding and Maturity Profile31 December 2016
Drawn Committed Undrawn Debt Facilities
Capital management settings
Fletcher Building will continue to target strong ‘BBB’ credit characteristics
Gearing:
• Target of Net Debt to Net Debt + Equity (including Capital Notes) of 30-40%
• As at 31 December 2016: 35.4%
Leverage:
• Target Net Debt to EBITDA of 2.0 to 2.5 times
• As at 31 December 2016: 2.5 times
Dividend pay-out:
• Target ratio of 50% to 75% of net earnings (before significant items)
• For H1 17: 74%
Fletcher Building Half Year Results Presentation | © February 201733
Key ratios
Fletcher Building Half Year Results Presentation | © February 201734
-27
51
9
-3
11
51
Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Dec-16
Total Shareholder Return (TSR)Percentage1
3733 32 32
27
35
Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Dec-16
Debt/Debt Plus EquityPercentage
10.2 10.812.3 12.5 12.7 13.2
Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Dec-16
Return on Average FundsPercentage2
2.622.27 1.99 2.02
1.59
2.48
Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Dec-16
Net Debt/EBITDATimes
1. Returns for previous 12 months2. Earnings before interest, tax and significant items / average funds
Working with you
Strategy Update
Fletcher BuildingHalf Year Results Presentation 2017
People and performance culture
Targeted investments
Prudent portfolio management
Turnaround capability
Focus on shareholder value
Strategy summary
36 Fletcher Building Half Year Results Presentation | © February 2017
$
Performance culture embedded through Accelerate
37 Fletcher Building Half Year Results Presentation | © February 2017
• Weekly cadence
• Balance of revenue, cost and efficiency
• Rigorous tracking of benefits and returns
Identify Ideas
Value identification Value captureL2
L3L4 L5
L1
TrackPlan ImplementValidate Realise Value
Number of initiatives at each layer1
1,876 1,794 1,692 1,182 618
• Continuous renewal of initiative pipeline
• Annualised benefits realised by end of FY18
1. Total EBIT initiatives
(80)
(60)
(40)
(20)
‐
20
40
60
80
Yr 0 Yr 1 Yr 2 Yr 3
Combine
d EB
IT ($
m)
Turnaround capability established
38 Fletcher Building Half Year Results Presentation | © February 2017
• FB management is developing a track record of turning around underperforming businesses
• Improved performance reflects a mixture of improved pricing, product offering, customer service, operational efficiencies and cost-out delivery
• Current turnarounds in Australia and Europe being executed despite the backdrop of subdued market activity
Turnaround businesses:• Formica North America• Iplex AU• Mico• Fletcher Insulation• Formica Europe• Tradelink1. Combined EBIT of FBU businesses before significant items
Collective Turnaround of Selected FBU Businesses1
Targeted Investments
39 Fletcher Building Half Year Results Presentation | © February 2017
• >$700m invested in Residential and Higgins
• Additional c. $100m per annum in fast payback capital projects
• Major investments aligned with structural drivers
Auckland Housing Shortage
(5,000)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1,000
1,100
1,200
1,300
1,400
1,500
1,600
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Dw
ellin
gs
Pop
ulat
ion
Dwellings needed to keep pace with population growth Estimated dwellings built
Cumulative shortage of dwellings Estimated Auckland Population
NZ Infrastructure Pipeline
Source: Infometrics
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 2021F
NZ$
m
Roading Telecoms Water Works Electricity Ports & Airports Other Transport Irrigation
Irrigation 1%Electricity
13%
Telecoms 16%
Other Transport 2%
Roading 49%
Water Works 13%
Ports & Airports 6%
NZ Infrastructure 2016-2025
Prudent Portfolio Management
40Fletcher Building Half Year Results Presentation | © February 2017
• Divestment of Rocla Quarries and acquisition of Higgins highlights positive return on incremental capital employed
Business Unit Investment/ Proceeds
EBIT1 ROFE
Rocla Quarries $205m $18m2 c.9%
Higgins $307m $40m - $45m3 c.15%
Net $102m $22m - $27m 22% - 25%
1. Before significant items2. Last full year of earnings reported in FY153. Estimated annualised earnings
Focus on shareholder value
41 Fletcher Building Half Year Results Presentation | © February 2017
Underlying Earnings Growth
Disciplined Capital Management
Superior Value-Creation
Strong Cash+ =
Market Growth &
Share Gains
Net Price > COGS Inflation
SG&A Control
Sustain Capex: $186m
M & A or Buybacks2:
$107m
EPS Growth:17%
Post-tax Operating Cash-flow:
$568m
Organic Growth Investment1:
$119m
Dividend Yield3:5%
Dividends5:$209m
Net Working Capital
ROFE: +0.4% pts
22%
1. Includes purchase of land for residential development.2. Divestment of Rocla Quarries completed January 2016 and acquisition of Higgins
completed in July 2016.3. Yield reflects fully imputed dividend for NZ tax-resident investor4. Net of distribution maintained in lieu of shares issued under DRP
+
Results for last 12 month period (ie CY 2016)
Working with you
Outlook
Fletcher BuildingHalf Year Results Presentation 2017
42
Outlook FY17
New Zealand• Strong macro-economic conditions expected to continue to benefit FY17 and
provide opportunities to expand Building Products and Distribution operating margins
• Elevated levels of residential, commercial and infrastructure construction are likely to be sustained in the medium term
Australia• NSW still looking positive but WA downturn has been tough to digest• Standalone housing proved resilient to date, multi-dwellings showing signs of
peaking but some segments of civil infrastructure look more positive• Underlying earnings of Tradelink, Stramit and Tasman Sinkware to improve
Rest of World• Asia: showing signs of improving volumes but remain competitive• North America: impact of new presidential administration uncertain to date• Europe: mixed outlook with growth in UK offset by weaker Continental Europe• Further improvement to come from Formica businesses
Fletcher Building Half Year Results Presentation | © February 201743
Financial Outlook FY17
44
FY17 operating earnings (EBIT before significant items) expected to be in the range of $720m to $760m
Earnings from Higgins acquisition should offset the impact of discontinued operations:
• Pacific Steel
• Rocla Quarry Products
• Fletcher EQR
Capex forecast to be $275-325m versus $300m in FY16
Depreciation forecast to be $210-220m versus $194m in FY16
Fletcher Building Half Year Results Presentation | © February 2017
Working with you
Q&A
Fletcher BuildingHalf Year Results Presentation 2017
Appendix: New Zealand construction market has a strong pipeline
46Fletcher Building Half Year Results Presentation | © February 2017
Value of all NZ Construction Work Put in PlaceNZ$bn
Source: Infometrics
• Forecasts suggest medium term peak for residential construction but ‘stronger for longer’ infrastructure construction pipeline
$0
$5
$10
$15
$20
$25
$30
$35
$40
2002 2004 2006 2008 2010 2012 2014 2016 2018f 2020f
Residential Commercial Infrastructure Total
106%
26%
Appendix: Sectoral exposureExposures based on revenues
47 Fletcher Building Half Year Results Presentation | © February 2017
Geographical Exposure by Sector¹Residential
(New/A&A)* Commercial Infrastructure Other
New Zealand 44% 29% 12% 15%Australia 55% 22% 10% 13%Rest of World 44% 49% 0% 7%Total Manufacturing 49% 30% 9% 12%
New Zealand 79% 18% 0% 3%Australia 49% 51% 0% 0%Total Distribution 69% 29% 0% 2%
New Zealand 13% 45% 41% 1%Rest of World 0% 37% 63% 0%Total Construction & Residential 12% 44% 43% 1%
1. Excludes business sold or closed during the year* A&A – Additions and Alterations
Appendix: Building consent data
48 Fletcher Building Half Year Results Presentation | © February 2017
Dec 201512 months
Dec 201612 months
16/15% Mvmt
New Zealand
Residential Consents 27,129 29,967 +10%
Non Res WPIP ($m) 6,202 7,144 +15%
Infrastructure WPIP ($m) 6,594 6,703 +2%
Australia Source: Infometrics
Residential Consents - Standalone houses 118,997 117,056 (2)%- Multi residential and other dwelling types 120,074 113,258 (6)%
- Total 239,071 230,314 (4)%
Non Res WPIP (A$bn) 36.7 36.3 (1)%
Infrastructure WPIP (A$bn) 111.6 91.0 (18)%
US (Billions of US$) Calendar Years Source: BIS
Residential Consents (US$bn) 525 538 +2%
Non Res WPIP (US$bn) 465 481 +3%
Infrastructure WPIP (US$bn) 311 306 (2)%
Source: HIS Global Insight
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
NSW VIC QLD WA
2015 House 2015 Total Dwellings excl Houses2016 House 2016 Total Dwellings excl Houses
Appendix: Strongest growth in NSW; Western Australia experience a significant decline in approvals
49Fletcher Building Half Year Results Presentation | © February 2017
Dec 201512 months
Dec 201612 months
%Change
Stand-alone 118,997 117,056 (2)%
Multi + other Residential 120,074 113,258 (6)%
Total 239,071 230,314 (4)%
Change in housing approvals – by state12 months ended 31 Dec 2016 vs 2015
Source: HIS Global Insight
Appendix: Group Structure
50Fletcher Building Half Year Results Presentation | © February 2017
Building Products:Matt Crockett
International: Francisco Irazusta
Distribution:Dean Fradgley
Residential & Land Development:
Steve Evans
Construction:Graham Darlow
• GBCWinstone (NZ) including Higgins Aggregates
• Firth (NZ) • Humes (NZ)• Rocla Pipelines (Aus)• Winstone
Wallboards/Tasman Insulation (NZ)
• Fletcher Insulation (Aus)
• Iplex (NZ & Aus) • Sims Pacific Metals
(NZ)• Altus (NZ)
• Formica Asia• Formica Europe• Formica North
America• Laminex (NZ & Aus)• Roof Tile Group (NZ;
Africa; Asia; Europe; USA)
• PlaceMakers (NZ)• Mico (NZ)• EasySteel (NZ)• Pacific Coilcoaters
(NZ)• Fletcher Reinforcing
(NZ)• Tradelink (Aus)• Stramit (Aus)• Tasman Sinkware
(Aus)
• Fletcher Living (NZ)• Land Development• Property• Innovation
• Infrastructure (NZ)• Fletcher EQR (NZ)• South Pacific• Higgins Contracting
(NZ & Fiji)• Building + Interiors
(NZ)
Supported by Fletcher Building Corporate Services:People and Communications – Kate Daly, Chief People and Communications Officer
Strategy, Marketing and Finance – Bevan McKenzie, Chief Financial OfficerGroup Technology – John Bell, Chief Information Officer
Governance – Charles Bolt, Company Secretary and General CounselProcurement, Shared Services, Operations Excellence and Transformation - Lee Finney, Chief Transformation Officer