FLETCHER BUILDING LIMITED — AGM Information 2009

Nov 10, 2009

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Fletcher Building Limited 2009 Annual Shareholders Meeting

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Dr Roderick Deane Chairman

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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

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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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Overview remarks
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Sales

NZ$m

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Net earnings before unusual items

NZ$m

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Cashflow from operations

NZ$m

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Return on average funds

Percentage

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Dividends

Cents per share

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Total shareholder return

Percentage

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Fletcher Building relative share price performance

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140
120
100
80
60
40
20
0
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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

Debt / debt plus equity Percentage

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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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Hugh Fletcher Director

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Jonathan Ling Chief Executive Officer

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Strong performance in Steel, other businesses typically had lower volumes and margins

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1
EBITDA NZ$million
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12 months ended
June 2009
June 2008 296
255
214
171 175
159
131
123
82 80
40
18
Building Property Steel
Products
DistributionInfrastructure Laminates &Panels
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Residential construction activity was significantly lower in all key markets

	Jun 2009	Jun 2008	Jun 2007	09/08
Building Consents	12 months	12 months	12	% Mvmt
			months
New Zealand	12,503	20,902	23,344	-40
Australia	132,073	162,732	153,400	-19
1
US	565,000	859,000	1,389,000	-34
2
England	71,480	139,880	155,240	-49
3
Spain	68,116	147,426	231,136	-54

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Building Products result

	Jun 09	Jun 08
NZ$m	12mths	12mths	%∆
Sales	771	739	+4
1
EBITDA	131	171	-23
1
EBIT	106	148	-28
Funds	644	631	+2
Employed
ROFE %	16.5	23.5

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• 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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Distribution result

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	Jun 09	Jun 08		•	Sales impacted by weak NZ
NZ$m	12mths	12mths	%∆		housing starts but market
Sales	883	1,083	-18		share maintained.
EBITDA 1	40	82	-51	•	Significant staff reductions
1					implemented.
EBIT	30	73	-59
				•	Frame and truss
Funds Employed	144	185	-22		manufacturing activities consolidated.
ROFE %	20.8	39.5

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Infrastructure result

NZ$m	Jun 09 12mths Jun 08 12mths %∆
Sales	2,052 1,857 +11
EBITDA 1 -Concrete NZ -Concrete Aust. -Construction -Property	125 78 52 18 174 72 50 80 -28 +8 +4 -78
Total EBITDA	273 376 -27
EBIT 1	203 308 -34
Funds Employed	1,042 1,027 +1

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NZ Concrete

• Volume declines in cement, aggregates, readymix, masonry and concrete pipe.

• Reflects weaker residential & commercial construction markets only partly offset by infrastructure activity.

Australia Concrete

• Good volume growth in quarry volumes and non-pipe concrete products.

Construction

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Laminates & Panels result

NZ$m	Jun 09 12mths Jun 08 12mths %∆
Sales EBITDA -Laminex -Formica Total EBITDA 1 EBIT 1 Funds Employed	2,052 1,857 +11 99 60 166 48 -40 +25
	159 214 -26 74 141 -47
	1,832 2,094 -13

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Laminex

• Volumes down in NZ and Australia, export markets weak.

• Significant input cost increases in first half

Formica

• 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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Formica growth in Asia and North America turnaround boosted result, but Europe weak

EBITDA NZ$m 1	EBITDA NZ$m 1	2H09	1H09	2H08	1H08
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

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Steel result

	Jun 09	Jun 08
NZ$m	12mths	12mths	%∆
Sales	1,321	1,279	+3
1
EBITDA	175	123	+42
1
EBIT	154	101	+52
Funds	562	589	-5
Employed
ROFE %	27.4	17.1

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• 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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Health and safety
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Current operating climate

• 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

Funding and Maturity Profile

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400
300
200
298
120
9 20 202
100 57 144
164
0
112
75 68 59 75
40
0
-5 19
-100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NZ$ millions
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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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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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