FBU confirms strategy, operating model and Executive Team

Fletcher Building confirms strategy and operating model and announces
Executive Team appointments

Auckland, 21 June 2018: Fletcher Building today confirmed its strategy, which is designed to
improve financial and operating performance by focusing its portfolio on the New Zealand and
Australian markets and introducing a simpler and leaner operating model.
Fletcher Building CEO Ross Taylor said: “Fletcher Building is currently one of the most
diversified building materials companies in the world, with operations spanning multiple
geographies, sectors, value chains and product lines.
“As we announced to the market in April, we have made the decision to focus our portfolio by
divesting our Formica and Roof Tile Group businesses and focusing our capital and capability
behind the New Zealand and Australian markets.
“While we don’t expect these markets to experience the same levels of growth they have seen
in recent times, we do expect them to remain stable, and with only 15 per cent share of the
New Zealand market and 1 per cent in Australia
1
, there is plenty of opportunity to deliver more
from our existing operations.
“In New Zealand our focus will be on growing our core operations in building products and
distribution, leveraging our strong positions in the concrete value chain and residential
construction, and returning construction to sound operating performance by closing out
remaining Building + Interiors (B+I) projects within provisions, and profitably growing our
infrastructure and roading businesses.
“We will leverage global trends in product, service and channel innovation to deliver more value
for our customers right across our portfolio. Taking one example, with our planned investment
in a new panelisation plant in Auckland, we will aim to deliver homes more efficiently for a
supply-constrained market.
“In Australia we are targeting a significant improvement in the operating and financial
performance of our existing businesses, and in time, we will seek to expand our portfolio as we
have done in New Zealand through targeted acquisitions.
“We see the strategy being delivered over three broad stages. In FY19 we will focus on
stabilising and turning around our existing businesses, while divesting Formica and Roof Tile

1
Sources: FBU Management estimates, Infometrics WPIP, BIS Oxford Economics (Residential, Non-Residential Work
Done), ABS (Value of Engineering Work Commenced)

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Group. By FY20 we should be well positioned to deliver solid performance across the portfolio,
and from FY21 onwards we want to be achieving strong revenue and earnings growth year on
year.
“With successful implementation of the strategy we aim to deliver above-market revenue
growth and improved operating margins over the medium term.”
To enable the new strategy Fletcher Building will target investment behind its most strategically
important and highest returning businesses; increase its focus on innovation; pursue
improvements in procurement, operational efficiency and working capital; and introduce a
simpler and leaner decentralised operating model.
The new operating model will be introduced on 1 July 2018 and will reduce overheads across
the group by $30 million per annum, empower businesses at the front line and deploy a new
divisional structure that will align businesses to the new strategy.
The changes to structure have resulted in a number of new appointments to the Fletcher
Building Executive Team
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, which will also be effective from 1 July 2018:
– Dean Fradgley, currently Chief Executive Distribution, has been appointed to the newly
created role of Chief Executive Australia. All Australian businesses will now sit within this
one division.
– Bruce McEwen, currently General Manager of PlaceMakers, will join the Executive
Team as Chief Executive of Distribution New Zealand, which includes PlaceMakers and
Mico.
– Ian Jones, currently General Manager GBC Winstone, will join the Executive Team as
Chief Executive of the newly created Concrete Division, which includes Golden Bay
Cement, Winstone Aggregates and Firth.
– Hamish Mcbeath, currently General Manager Fletcher Steel, will join the Executive
Team as Chief Executive of the newly created Steel Division, which includes all the
Company’s New Zealand steel businesses.
– David Thomas will continue as Interim Chief Executive of the revised Building Products
Division, while a permanent replacement is recruited.
– Steve Evans will continue as Chief Executive of the Residential Division.
– Michele Kernahan will continue as Chief Executive of the Construction Division.
– Claire Carroll has been permanently appointed as the Chief People and
Communications Officer.
– All other corporate function Executive roles remain unchanged.
There is no change to the estimated FY18 EBIT for the Group (excluding B+I and significant
items) of $680-720 million and no change to the estimated B+I FY18 EBIT loss of $(660) million
announced on 14 February 2018.

2
See Appendix for new Fletcher Building organisational structure

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The FY18 result is likely to include a number of significant items including restructuring charges
associated with the implementation of the new operating model (a charge of between $85-$95
million), a gain on the sale of Fletcher Building’s 20 per cent stake in the Dongwha processing
plant through Laminex New Zealand (a gain of approximately $12 million), and a likely
impairment of the carrying values of the Rocla and Roof Tile Group businesses. Fletcher
Building’s financial results for the year ending 30 June 2018 will be announced on Wednesday,
22 August 2018.
An announcement regarding the changes to the Board will be made on Friday 22 June 2018.
Macquarie Capital has been appointed as advisor to Fletcher Building on the divestment of the
Formica Group.

#Ends
Media Teleconference and Webcast
Fletcher Building CEO Ross Taylor and CFO Bevan McKenzie will host a teleconference and
webcast for media at 10.00am NZT today (8.00am AEST) to provide more detail on this
announcement. Details are set out below.
Webcast: https://edge.media-server.com/m6/p/adamnqiy
Teleconference Passcode: 113918
Australia Toll Free: 1 800 558 698 Hong Kong: 800 966 806
Australia Local: +61 2 9007 3187 Japan: 0053 116 1281
New Zealand Toll Free: 0800 453 055 Singapore: 800 101 2785
NZ Local (Auckland): +64 9 929 1687 UAE: 8000 3570 2705
NZ Local (Wellington): +64 4 974 7738 United Kingdom: 0800 051 8245
NZ Local (Christchurch): +64 3 974 2632 United States: (855) 881 1339
Investor Day Webcast
A presentation of the new strategy will be made to investors today in Sydney, at 9.00am AEST.
You can watch the webcast live at the following link: https://edge.media-
server.com/m6/p/86dp6vrk
For further information please contact:
MEDIA
Leela Gantman
Head of Communications
+64 27 541 6338
Leela.gantman@fbu.com
INVESTORS AND ANALYSTS
Rodney Deacon
Head of Investor Relations
+64 21 631 074
Rodney.deacon@fbu.com

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Appendix: Fletcher Building Organisational Structure and Executive Appointments, effective 1 July 2018