FLETCHER BUILDING LIMITED — Management Reports 2008

Mar 12, 2008

Growing Infrastructure

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CONCRETE &
AGGREGATES CEMENT PRODUCTS CONSTRUCTION
Revenue +0% Revenue +10% Revenue -9% Revenue -5%
EBIT -13% EBIT +8% EBIT - 9% EBIT +26%
Market 40% Market 52% Market 30% Backlog $1.2b
share share share
(Auckland) (RMC)
Source: Fletcher Building business units (exclude profit on asset sales ($16m Dec07 and $5m Dec06)
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ROCLA PIPES ROCLA QUARRIES
Revenue +19% Revenue 0%
EBIT +35% EBIT 0%
Market share 35% Sydney market remains soft.
NSW & Victoria are challenging. Other states are strong,
QLD is strong. - particularly QLD
Source: Rocla Pipeline Products, Rocla Quarry Products
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Source: Fletcher Construction backlog

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Source: Fletcher Construction Infrastructure Growing Infrastructure

• Price increases restrained by competitive pressure.

• Price increase of $5.60 per tonne announced, effective 1 February 2008.

• Production output ahead of expectation; no clinker imported!

• Manufacturing costs reduced.

Source: Golden Bay Cement

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• Price increases more difficult to achieve.

• Operational improvements are reducing costs further this year.

• Hunua volumes down – both roading and manufacturing (RMC and asphalt.)

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• Price leadership.

• Demand conditions might lead to softer prices.

• Increased material and distribution costs have been successfully passed on.

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• Price increases more subdued.

• Significant EBIT growth has now slowed.

• Slow 1[st] half likely to be followed by bigger 2[nd] half.

• Highest backlog ever.

• Manufacturing upgrade for Papakura is to proceed – with good efficiency gains.

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Stresscrete Firth Peru Other $40-50m

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• . NZ Aggregates: acquisitions

• Cameron’s Quarry (Bay of Plenty);

• Land for future development.

• NZ Concrete: investments

• Four new plants;

• Masonry plant upgrade.

• NZ Concrete Pipe: investment

• Plant upgrade at Papakura.

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• . Australia Concrete Pipe / Products: expansion

• Sleeper upgrade completed;

• Copa Water acquired;

• Rockhampton pole plant upgrade.

• NZ Roading Products: ‘bolt on’

• Armorflex acquired;

• Trenchshoring NZ Ltd established (JV).

• Australian Quarries: investment

• Quarry land acquired (NSW, WA, SA);

• Sand glass plant upgrade.

Total $65m

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• New cement terminal for Auckland – high strategic importance;

• Non-pipe products delivering growth for Rocla;

• Rocla Quarries positioned well for a turnaround in NSW infrastructure opportunities;

• Recycling opportunities under consideration.

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Long-term value creation

• Five opportunities being explored

• Three Kings

• Residential zoning sought

• 2014 start – post filling

• $200m in revenue (2007 dollars / present values)

Pokeno

• 16 Ha. land for industrial zoning

• Quarry zone intact

• Further land for future use

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Construction full order book down Housing Product Volumes flat some areas of weakness Margins InfrastructureGrowing Infrastructure

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