Fletcher Building Market Update

Fletcher Building Limited, Private Bag 92114, Auckland 1142, 810 Great South Road, Penrose, Auckland 1061, New Zealand
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Fletcher Building Market Update

Auckland, 13 May 2024: Fletcher Building Limited (the “Company”) today provides a
trading and market update.

Current market conditions

Market conditions across the Company’s Materials and Distribution
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divisions have
weakened throughout FY24. In New Zealand, market volumes to date in 2H24 have
moved ~5% lower than 2Q24, and in Australia market volumes to date in 2H24 are
~10% lower compared to 2Q24.

There has also been a notable slowdown in house sales in the New Zealand market
and an end to the house price momentum seen through the first half of FY24.

Trading update and outlook

At the Interim Results in February 2024, the Company provided guidance for FY24
EBIT before Significant Items to be in the range of $540 million to $640 million. The
mid-point of the Company’s guidance range assumed a continuation of market
volumes and house sales run-rates broadly in line with those seen in 2Q24.

As a result of the trading conditions in 2H24, the Company now expects lower FY24
earnings. The Company’s updated guidance is for FY24 EBIT before Significant Items
in a range of $500 million to $530 million inclusive of $10 to $15 million of restructuring
costs related to cost out initiatives. The variability within the range is driven by May
and June being two of the largest trading months for the Company.

Although all of the Material and Distribution divisions have experienced softer
revenues due to the market conditions, the Company’s updated guidance is primarily
driven by the following areas:
- Challenging conditions in the Distribution division given its exposure to the
residential sector, which has resulted in intense price competition. The
Distribution division’s market share has stabilised in 2H24; lower pricing has
been required to achieve this, resulting in lower gross margins;
- A sharp correction in the Australian residential market leading to a forecast
~10% revenue decline for the Australian division in 2H24 compared to 2Q24;
and

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Materials and Distribution divisions = Concrete, Building Products, Distribution and Australia

Fletcher Building Limited, Private Bag 92114, Auckland 1142, 810 Great South Road, Penrose, Auckland 1061, New Zealand
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- A combination of weaker revenues and gross margin pressure in certain
Building Products businesses, notably Iplex NZ and Steel, where end
markets have been particularly soft.

Although we continue to observe solid performance by some business lines within
these divisions, these trends are not sufficient to offset the broader declines affecting
our business.

The Concrete division has demonstrated resilience, delivering stable revenues and
improved gross margins so far in 2H24, notwithstanding ongoing contraction in market
volumes and price competition intensifiying. Its performance reflects market share
gains and a strategic refocus on commercial and infrastructure sectors.

In addition, in a slowing housing market, Residential & Development has continued to
perform well and continues to expect ~900 units taken to profit for the full year. The
Construction divison’s earnings are improved reflecting the rebalancing of the order
book to a lower risk profile and strong execution in the Brian Perry Civil business.

The Company remains strongly focused on the sustainable reduction of both fixed
and variable costs, with overhead cost control particularly strong.

The Company expects market conditions to remain challenging in both New Zealand
and Australia in the near term and continues to look for opportunities to manage costs
against that backdrop.

Balance Sheet and Cash Flows

The Company remains focused on securing robust cash flows. Good working capital
disciplines have meant that trading cash flows (excluding legacy construction
projects) are robust. The Company expects further significant trading cash inflows in
the May-June period, driven by: the seasonally higher trading months in the Materials
and Distribution divisions; and settlement of house and industrial land sales in
Residential & Development.

The Company expects that Net Debt at 30 June 2024 will be in a range of $1.9 billion
to $2.0 billion. The Company’s liquidity profile remains robust, with $2.8 billion of debt
facilities in place and liquidity at 30 June 2024 is expected to be $0.8 billion to $0.9
billion.

Fletcher Building Limited, Private Bag 92114, Auckland 1142, 810 Great South Road, Penrose, Auckland 1061, New Zealand
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Acting CEO Commentary

Acting CEO Nick Traber said, “Given the current conditions, our focus has been on
managing things within our control, in particular: customer service; costs and
margins; cash flows; capital allocation; funding; and closing out the remaining legacy
construction projects.

“Fletcher Building has many strongly positioned core business assets that have
demonstrated resilience in current market conditions. Our immediate priorities are to
optimise the performance of each of our businesses, close out legacy issues and
tightly manage risks to maximise our ability to deliver shareholder value. Our people
are integral to achieving this and I would like to thank each of them for their ongoing
efforts as we navigate the tougher market environment.”

Conference call to be held today
Fletcher Building management will host a Q&A briefing today, Monday 13 May 2024 at
12:00pm NZST / 10:00am AEST to discuss today’s announcement. Participants can
register for the conference by navigating to the following link:
https://s1.c-conf.com/diamondpass/10039019-nrtiv0.html

Upon registration you will be provided with the dial in number, passcode, and your
unique access PIN. To join the conference simply dial the number and enter the
passcode followed by your PIN, and you will join the conference instantly.
#Ends
Authorised by:
Ashleigh Harding
Company Secretary

For further information please contact:
MEDIA
Christian May
General Manager – Corporate Affairs
+64 21 305 398
Christian.May@fbu.com
INVESTORS AND ANALYSTS
Aleida White
Head of Investor Relations
+64 21 155 8837
Aleida.White@fbu.com