FLETCHER BUILDING LIMITED — Capital/Financing Update 2009

Mar 31, 2009

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

1

==> picture [229 x 64] intentionally omitted <==

Capital Structure Initiatives and Trading Update

1 April 2009

Jonathan Ling Chief Executive Officer

Bill Roest Chief Financial Officer

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

2

Disclaimer

The information in this presentation is an overview and does not contain all information necessary to an investment decision. It is intended to constitute a summary of certain information relating to the timetable for an issue of ordinary shares (“Shares”) by Fletcher Building Limited (“Fletcher Building”).

The information in this presentation does not purport to be a complete description of Fletcher Building or the issue of the Shares. In making an investment decision, investors must rely on their own examination of Fletcher Building, including the merits and risks involved. Investors should consult with their own legal, tax, business and/or financial advisors in connection with any acquisition of securities.

The information contained in this presentation has been prepared in good faith by Fletcher Building. No representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this presentation, any of which may change without notice. To the maximum extent permitted by law, Fletcher Building, its directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Fletcher Building, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any recipient through use of or reliance on anything contained in, or omitted from, this presentation.

This presentation is not a prospectus, investment statement or disclosure document, or an offer of shares for subscription, or sale, in any jurisdiction. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any “U.S. person” (as defined in Regulation S under the U.S. Securities Act of 1933, as amended (“Securities Act”)). The securities described in this presentation have not been registered under the Securities Act or U.S. state securities laws and, accordingly, may not be offered or sold to purchasers in the United States or to, or for the account or benefit of, U.S. persons absent registration under the Securities Act or in a transaction exempt from, or not subject to, registration thereunder and applicable U.S. state securities laws.

==> picture [194 x 54] intentionally omitted <==

==> picture [42 x 43] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

3

Forward looking statements

Certain statements contained in this presentation may constitute “forward looking statements” or statements about “future matters” and/or “forward‐looking statements” including within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

These forward‐looking statements speak only as of the date of this presentation. The forward‐looking statements involve known and unknown risks, uncertainties and other factors that may cause Fletcher Building’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward‐looking statements. Neither Fletcher Building, nor any other person, gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this presentation will actually occur.

The prospective financial information contained in this presentation necessarily is based upon a number of estimates and assumptions that, while presented with numerical specificity and considered reasonable by Fletcher Building, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Fletcher Building, and upon estimates and assumptions with respect to future business decisions which are subject to change. The inclusion of this information in the presentation should not be regarded as a representation or warranty with respect to its accuracy or the accuracy of the underlying estimates or assumptions or that Fletcher Building will achieve or is likely to achieve any particular results. This information also assumes the success of Fletcher Building’s business strategies. The success of the strategies is subject to uncertainties and contingencies beyond Fletcher Building’s control, and no assurance can be given that the strategies will be effective or that the anticipated benefits from the strategies will be realised in the period for which forecasts have been prepared or otherwise. Accordingly, there can be no assurance that these results will be realised. The prospective financial information presented in the presentation may vary from actual results, and these variations may be material. Prospective investors are cautioned not to place undue reliance on this information.

The pro forma information contained in this presentation is intended for informational purposes only, and does not purport to be indicative of the results that actually would have been obtained or the financial position that actually would have existed during and for the periods presented. The pro forma information does not comply with the requirements of Regulation S‐X under the Securities Act.

This presentation is being supplied to you solely for your information and may not be reproduced or distributed to any other person or published, in whole or in part, for any purpose. The distribution of this document outside New Zealand and Australia may be restricted by law. In particular, this document or any copy of it must not be released or distributed in the United States or to any U.S. person. Any failure to comply with applicable restrictions may constitute a violation of applicable securities laws. By receiving this document, you agree to the foregoing restrictions.

==> picture [194 x 54] intentionally omitted <==

==> picture [42 x 43] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

4

Agenda

• Summary

• Business update

• Capital structure update

• Details of equity raising

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

5

==> picture [685 x 457] intentionally omitted <==

----- Start of picture text -----

SUMMARY
----- End of picture text -----

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

6

Summary

• Fletcher Building is undertaking the following measures to strengthen the balance sheet and increase financial flexibility:

• Raising between NZ$465 and NZ$505 million of new equity

• Assessing initiatives to restructure and reduce manufacturing capacity across a number of its businesses

• Increasing its focus on cash retention through second half dividend reduction

• Guidance for net earnings before unusual items reaffirmed despite softening of conditions

• Unusual items of up to $160 million for FY09 will be incurred reflecting restructuring costs and capacity reduction initiatives

• A review of balance sheet carrying values in light of current outlook is being carried out:

• Preliminary assessment is for an asset impairment of up to $150 million at balance date and US tax benefit of NZ$50 million to be written off

• Equity raising extends financial covenant headroom and provides flexibility to access growth opportunities during the market recovery phase

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

7

==> picture [685 x 457] intentionally omitted <==

----- Start of picture text -----

BUSINESS UPDATE
----- End of picture text -----

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

8

Overview of current trading conditions

• Operating conditions in key markets have remained challenging and in some cases have deteriorated further

• NZ dwelling consents tracking below 15,000 per year business plan base case

• NZ commercial construction is weakening although the level of infrastructure expenditure remains strong

• Slowdown in Australia in both non‐residential and residential

• Current outlook remains uncertain in Australia and New Zealand, however, some offsetting fiscal stimulus is expected

• Global outlook remains mixed

• Signs of stabilisation in the US although at a low base

• Europe has weakened further

• Moderate growth in Asia continues

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

9

Updated FY09 earnings guidance

• At the February half year announcement, guidance was that net earnings before unusual items was expected to be towards the lower end of the analysts’ consensus range at that time of $289 million to $336 million. This assumes that there is no significant further deterioration in trading conditions from those experienced in the year‐to‐date.

• The analysts’ consensus range has subsequently narrowed to $280 million to $301 million.

• The company’s guidance for net earnings before unusual items remains unchanged despite softening of conditions

• Partly reflects progress of restructuring to date

• Subject to no further deterioration in current business conditions

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

10

Unusual Items (1): Restructuring & capacity reduction initiatives

Restructuring initiatives

• Plans to further rationalise business operations and reduce operating costs are being implemented

• Charges arising in 2H FY09 are expected to be approximately $25 million to $45 million (after tax) in addition to the $15 million (after tax) recognised in 1H FY09

• Specific initiatives and expected savings will be confirmed as plans are finalised

Capacity reduction initiatives

• Streamlined manufacturing footprint identified ‐ removing older manufacturing facilities to be undertaken if demand continues at current low levels

• Accounting charges expected to be up to $100 million after tax (~ 40% cash) and if incurred will be recognised during the remainder of FY09

• Changes will, if undertaken, result in more effectively scaled manufacturing capacity and lower unit costs

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

11

Unusual Items (2): Accounting asset impairments

Potential adjustments to asset carrying values

• Preliminary review has indicated carrying value of certain investments including Formica has reduced due to current market outlook and ‘mid‐cycle’ earnings

• Impairment of certain assets pending review could be up to $150 million (up to 2% of total assets at December 2008)

• Indicative and subject to a full impairment review at 30 June 2009

US tax benefit recognition

• Realisation of benefit from tax losses arising on the acquisition of Formica is likely to be delayed as a result of reduced taxable earnings

• Decision to write off $50 million consistent with the requirements of the accounting standards

• Benefit of tax losses is expected to be realised in future years as taxable earnings are generated

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

12

Summary of unusual items for FY09

One‐off items	Size (after tax)	Cash	Description
	NZ$
Restructuring costs	$40‐60m	~66% cash	• $15m of $40‐60m was announced and
			included in 1H FY09
			• Spread across business units
Capacity reduction	up to $100m	~40% cash	• Includes factory closures and
initiatives			rationalisation of product lines
			• Formica contribution of approximately
Potential adjustments to	up to $150m	non‐cash	$75m including $60m non‐cash items • Approximately $140m impairment
asset carrying values			relating to Formica in order to reflect
			current outlook
			• Also Laminex and Building Products
US tax benefit recognition	$50m	non‐cash	• Benefit may be realised longer term
			against future taxable earnings

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

13

==> picture [685 x 457] intentionally omitted <==

----- Start of picture text -----

CAPITAL STRUCTURE UPDATE
----- End of picture text -----

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

14

Approach to capital structure initiatives

==> picture [601 x 35] intentionally omitted <==

----- Start of picture text -----

Objectives and key benefits
----- End of picture text -----

• Proactively adopting a more conservative capital structure

• Strengthened balance sheet

• Increased financial flexibility

• Increased focus on cash retention

• Continued access to credit markets on acceptable terms

• Comparable to other companies with an investment grade credit rating

• Flexibility to access growth opportunities during the market recovery phase

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

15

Equity raising to strengthen capital position

• Fletcher Building is raising between $465 million and $505 million of new equity

• $405 million underwritten Placement

• Share Purchase Plan of up to $100 million, underwritten to $60 million

• Top‐Up Offer of up to $20 million, issued to the extent the SPP proceeds are less than $100 million

• Equity raising proceeds to be used to reduce net debt

• Proforma gearing* will be reduced from 41.3% at 31 December 2008 to approximately 35.2%

• Significant headroom with no covenant concerns

• Ensures Fletcher Building is well positioned amongst its global peers

• Net debt to net debt plus book equity based on net equity raising proceeds of $465 million

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

16

Pro forma capital structure and balance sheet

==> picture [255 x 50] intentionally omitted <==

----- Start of picture text -----

NZ$m
----- End of picture text -----

==> picture [96 x 50] intentionally omitted <==

----- Start of picture text -----

Dec‐08
actual
----- End of picture text -----

==> picture [127 x 50] intentionally omitted <==

----- Start of picture text -----

pro forma
adjustment
----- End of picture text -----

==> picture [105 x 50] intentionally omitted <==

----- Start of picture text -----

Dec‐08
pro forma
----- End of picture text -----

	Capital notes	453	‐10	443
	Drawn debt	1,642	‐382	1,260
	(less) Cash	(92)		(92)
	Net Debt	2,003	‐392	1,611
	Book Equity1	2,848	+121	2,969
	Gearing2	41.3%		35.2 %

1 Book Equity reflects new equity raised less potential unusual items.

2 Net debt to net debt plus book equity. Assumes capital notes rollover, net equity raising proceeds of $465m from Placement, potential one‐off unusual items of $360m. Not adjusted for currency translation since Dec‐08.

==> picture [194 x 54] intentionally omitted <==

==> picture [42 x 43] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

17

Debt profile

• Equity raising covers all 2011 and

• 2012 maturing drawn debt

• Average interest rate of 6.65% in December 2008 (down from 7.6% in FY08) with 60% of portfolio fixed

• Committed undrawn facilities of

• $605 million as at 31 December 2008

Funding and maturity profile as at 31 December 2008 adjusted for capital notes rollover

==> picture [364 x 258] intentionally omitted <==

----- Start of picture text -----

Equity raising covers these maturities
NZ$ millions
----- End of picture text -----

June Years

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

18

Key banking covenants

• Significant headroom with no covenant concerns before and after equity raising

• The equity raising increases Fletcher Building’s headroom under all covenants

• Capital structure comparable to companies with an investment grade credit rating

Notes:

1. Assumes net equity raising proceeds of $465M

==> picture [83 x 13] intentionally omitted <==

----- Start of picture text -----

EBIT / Interest
----- End of picture text -----

==> picture [287 x 329] intentionally omitted <==

----- Start of picture text -----

headroom
Senior EBIT / Interest
headroom
Senior Net Debt / EBITDA
headroom
----- End of picture text -----

1. Rolling 12 month calculations

2. Pro forma EBIT adjusted for unusual items per covenant definitions

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

19

Dividend and DRP

• Reduction in the second half dividend is anticipated with current expectations this will be around 14cps (28cps annualised) on increased capital

• Final dividend will be set with reference to earnings performance and future trading expectations

• 24cps interim dividend will be paid to eligible shareholders on 8 April 2009 as previously announced

• Decision not to proceed with allotment of shares under current DRP for the 24cps interim dividend

• All participants in the current DRP will receive a cash dividend

• The DRP will remain operative for future dividends

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

20

==> picture [685 x 457] intentionally omitted <==

----- Start of picture text -----

DETAILS OF EQUITY CAPITAL RAISING
----- End of picture text -----

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

21

Details of the offer: Placement

Fully Underwritten Institutional Placement

• $405 million underwritten institutional placement

• Placement price of $5.35 per share

• The new shares will rank equally with existing shares, however, will not be entitled to receive the dividend of 24cps in respect of the six months ended 31 December 2008

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

22

Details of the offer: Share Purchase Plan and Top-Up Offer Share Purchase Plan

• Shareholders in New Zealand and Australia have the opportunity to subscribe for new Fletcher Building shares at an expected aggregate amount of up to NZ$11,500 or A$9,000

• Pricing: lower of 3% discount to VWAP or institutional placement price

• Offered to New Zealand and Australian shareholders on the register at 8 April 2009

• Underwritten to $60 million

Top‐Up Offer

• $20 million offer to eligible investors who would otherwise be diluted by the placement, for any shares not subscribed under the SPP

• Price will be the same as the institutional placement price

• Similar timetable to the SPP

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

23

Equity timetable and key dates

==> picture [263 x 35] intentionally omitted <==

----- Start of picture text -----

Event
----- End of picture text -----

==> picture [97 x 35] intentionally omitted <==

----- Start of picture text -----

Date
----- End of picture text -----

==> picture [97 x 35] intentionally omitted <==

==> picture [98 x 35] intentionally omitted <==

Event	Date
Placement date	1 April 2009
Trading Halt on NZX and ASX	1 April 2009
Allocations finalised	2 April 2009
Trading resumes on NZX and ASX	2 April 2009
Placement settlement date	8 April 2009
Record date for SPP and Top‐Up Offer	8 April 2009
Capital Structure Initiatives and Trading Update	1 April 2009

24

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS

==> picture [309 x 323] intentionally omitted <==

==> picture [194 x 54] intentionally omitted <==

Capital Structure Initiatives and Trading Update | 1 April 2009

==> picture [42 x 43] intentionally omitted <==