Fletcher Building (FBU) Investor presentation summary

Equity raising overview

• Seeking to raise NZ$700 million through a fully underwritten placement (~NZ$282m) and an accelerated non-renounceable entitlement offer (~NZ$418m).

• Proceeds will be used to repay existing debt, reducing pro forma FY24 net debt from NZ$1,766m to NZ$1,088m.

• Pro forma leverage drops from 1.99x to 1.22x, within the 1.0–2.0x target range, supporting investment grade credit rating.

• Offer price set at NZ$2.40 per share, a 12.9% discount to TERP and 17.0% discount to last close.

• Approximately 292 million new shares to be issued, representing 37.3% of current shares on issue.

Strategic and operational context

• Operating in attractive markets with long-term opportunities, underpinned by population growth and infrastructure needs.

• Recent leadership changes and divestments (e.g., 50% sale of Fiji Construction, Tradelink divestment) to strengthen the balance sheet.

• Joint Industry Response agreed in principle for WA plumbing failures, with a pre-tax provision of ~A$155m expected in FY25.

• Legacy construction projects (NZICC, WIAL Carpark, P2W) nearing completion, with no change to provisions since HY24.

• Cost reduction initiatives targeting ~NZ$180m in FY25 to offset inflation and market weakness.

Market and financial performance

• Over 50% of revenue exposed to residential construction; a 30–40% decline in A&NZ housing activity over two years has impacted earnings.

• FY24 saw market volumes down 10–15% YoY in Materials & Distribution, with revenues down 7% YoY.

• Group overheads down 2% YoY, with cash flows tracking ahead of plan.

• FY25 outlook remains cautious, with management vigilant to further market weakness and targeting significant cost savings.