Fletcher Building (FBU) Investor presentation summary

Joint industry response agreement

• An in-principle agreement was reached among the WA Government, Iplex AU, and most builders to address Perth plumbing failures, covering direct repair costs with Iplex AU funding 80% and the WA Government 20%, capped at A$30m.

• The response includes a range of repair measures, from pipe repairs to full house re-pipes, and offers temporary accommodation for extensive repairs.

• Leak detector units will be provided free to all affected homeowners, funded by Iplex AU.

• The agreement is open-ended, available to current and future homeowners, and does not require a product recall.

• BGC, a major builder, has not joined but may do so on the same terms; its homes represent 50-60% of those affected.

Financial impact and provisions

• Estimated total provision is ~A$155m: A$120m for repairs, A$20m for leak detectors, and A$15m for overheads, to be recognized as a significant item in FY25.

• Cash outflows are expected over five years, with A$40-50m in year one and A$15-35m annually thereafter, assuming BGC joins.

• The provision assumes up to 35% of 15,000 WA homes with Typlex Pro-Fit pipes may experience leaks, a rate higher than current trends.

• If BGC does not participate, actual cash outflows will be proportionally lower.

• Legal costs are excluded from the provision; only direct repair and program costs are included.

Litigation and risk management

• The agreement is on a no liability, no admissions basis, with a "no sue" provision among participants.

• The JIR may terminate or be renegotiated if third-party lawsuits result in different outcomes.

• A class action and a separate claim by BGC are ongoing, both alleging product quality issues; Iplex AU intends to defend these.

• Homeowners are not required to waive rights to pursue claims outside the JIR.

• Successful litigation against Iplex AU could have a material adverse impact.