Fletcher Building returns to profit, EBIT up 26%
Fletcher Building Limited, 810 Great South Road, Penrose, Auckland 1061, New Zealand
19 August 2026
Fletcher Building returns to profit, EBIT up 26%
FY26 financial highlights
• EBIT from continuing operations before Significant Items
of $414 million up $85
million on FY25
• Net earnings of $228 million, an improvement of $647 million on FY25
• Earnings per share of 21.2 cents against a 41.4 cent loss in FY25
• Net cash from operating activities of $715 million, up from $501 million in FY25
• Net debt of $637 million, reduced from $999 million at 30 June 2025
Commenting on the result, Managing Director & CEO Andrew Reding said: "Fletcher
Building is significantly more resilient than it was twelve months ago. We have moved at
pace to improve our business model, and the strategic reset we set out last year is now
starting to deliver tangible results. Our portfolio has been simplified with the divestment of
the Construction division and other non-core operating units, and we used the proceeds to
strengthen our balance sheet.”
“Our core manufacturing divisions performed well in a difficult trading environment, and a
sustained focus on operational and capital discipline saw us materially improve net cash
from operating activities for the year. We acknowledge there is still more work to do to
achieve our targeted returns on capital. However, the Group is now more focused, more
resilient and better positioned to benefit once market conditions start to recover.”
FY26 EBIT from continuing operations before Significant Items finished approximately 3%
above the July guidance range, with the variance primarily attributable to the finalisation of
employee-related provisions.
Dividend
The Board has not declared a dividend for FY26. The Group’s dividend policy will be reset
and communicated to shareholders once the Group is generating positive free cashflow
and is in the lower half of the net debt target range.
Outlook
Market volumes recovered gradually through the second half of FY26. The economic,
political and geopolitical backdrop remains uncertain, and is expected to weigh on
performance in the first half of FY27. A meaningful recovery in underlying volumes is not
expected until calendar year 2027.
Andrew Reding said: “Our priorities remain clear: maintain cost and capital discipline,
complete the remaining legacy workstreams, and position the Group to capture upside
once demand improves."
ENDS
Authorised for release to the market by Haydn Wong, Company Secretary.
_____________________________________________________________________________________________________________
For further information please contact:
INVESTORS Jeremy Yan, GM Corporate Finance & Investor Relations +64 27 295 2384 Jeremy.Yan@fbu.com
MEDIA Christian May, Chief Corporate Affairs Officer +64 21 305 398 Christian.May@fbu.com
For information on Fletcher Building visit fletcherbuilding.com
---
Results Announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Results for announcement to the market
Name of issuer Fletcher Building Limited
Reporting Period 12 months to 30 June 2026
Previous Reporting Period 12 months to 30 June 2025
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$5,994,000 7.3%
Total Revenue $7,042,000 (2.4%)
Net profit/(loss) from continuing
operations
$199,000 N/A
Total net profit/(loss) $228,000 N/A
Final Dividend
Amount per Quoted Equity
Security
The Board has resolved not to declare a final dividend for FY26.
Imputed amount per Quoted
Equity Security
Record Date
Dividend Payment Date
Current period Prior comparable period
Net tangible assets per Quoted
Equity Security
$3.11 $2.76
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
• Group revenue from continuing operations of $5,994 million, 7.3%
up compared to FY25, with higher revenues across all divisions.
• EBIT before Significant Items from continuing operations of $414
million compared to $329 million in FY25.
• Significant Items expense of $41 million from continuing
operations (mainly PIFWA-related costs, Laminex Australia site
closures and silicosis-related claims, and the Laminex New Zealand
Taupō manufacturing transition) and $1 million gain from
discontinued operations. Discontinued operations included the
$120 million net gain on the Construction divestment, largely
offset by retained legacy Construction costs and provisions and
other disposal-related write-downs and costs.
• Group Net Profit After Tax of $228 million, compared to Net Loss
After Tax of $419 million in FY25.
Authority for this announcement
Name of person authorised to
make this announcement
Haydn Wong, Group General Counsel and Company Secretary
Contact person for this
announcement
Jeremy Yan, GM Corporate Finance & Investor Relations
Contact phone number
+64 27 295 2384
Contact email address
jeremy.yan@fbu.com
Date of release through MAP
19/08/2026
Audited financial statements accompany this announcement.
---
Full Year Results
to 30 June 2026
19 AUGUST 2026
Golden Bay – Portland Manufacturing Plant
Update picture
Important Information
This presentation has been prepared by Fletcher Building Limited and its group of companies (together “Fletcher Building”) for informational purposes. This disclaimer applies
to this document and the verbal or written comments of any person presenting it.
This presentation provides additional comment on the 2026 Full Year Financial Results, as derived from Fletcher Building’s financial statements dated 18 August 2026. As such,
it should be read in conjunction with, and subject to, the explanations and views given in those financial statements. Unless otherwise specified, all information as derived
from Fletcher Building’s financial statements is for the 12 months ended 30 June 2026.
In certain sections of this presentation, Fletcher Building has chosen to present certain financial information exclusive of the impact of Significant Items. A number of non-
GAAP financial measures, such as measures before Significant Items, are included in this presentation which are used by management to assess the performance of the
business and have been derived from Fletcher Building’s financial statements for the 12 months ended 30 June 2026. You should not consider any of these statements in
isolation from, or as a substitute for, the information provided in Fletcher Building’s financial statements for the 12 months ended 30 June 2026, which are available at
www.fletcherbuilding.com. Details of Significant Items can be found in note 2.2 of those financial statements.
The information in this presentation has been prepared by Fletcher Building with due care and attention; however, neither Fletcher Building nor any of its related companies,
directors, employees, shareholders nor any other person gives any representations or warranties (either express or implied) as to the accuracy or completeness of the
information and, to the maximum extent permitted by law, no such person has any liability whatsoever to any person for any loss (including, without limitation, arising from
any fault or negligence) arising from this presentation or any information supplied in connection with it, or any reliance thereon.
This presentation may contain forward looking statements, that is statements related to future events or other matters. Forward looking statements may include statements
regarding intent, belief or current expectations in connection with future operating or financial performance, or market conditions. Such forward looking statements are based
on current expectations, estimates and assumptions and are subject to a number of risks and uncertainties, including material adverse events, significant one-off events or
expenses and other unforeseeable circumstances. There is no assurance that results contemplated in any of these forward looking statements will be realised. Actual results
may differ materially from those projected or assumed by such forward looking statements. Except as required by law, or the rules of any relevant stock exchange, no person is
under any obligation to correct or update this presentation at any time after its release or to provide further information about Fletcher Building.
The information in this presentation does not constitute financial product, legal, financial, investment, tax or any other advice or any recommendation.
2| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Agenda
1.FY26 at a glanceAndrew Reding, Managing Director & CEO
2.Operating performanceAndrew Reding, Managing Director & CEO
3.Our stakeholdersAndrew Reding, Managing Director & CEO
4.Financial resultsWill Wright, CFO
5.OutlookAndrew Reding, Managing Director & CEO
6.ConclusionAndrew Reding, Managing Director & CEO
3| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
FY26 at a glance
Andrew Reding,
Managing Director & CEO
Update image
FY26 key takeaways
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited5
❶
Steady performance in a tough macro environment
❷
Progressed the execution of our strategy
❸
Resilient balance sheet, with net debt in target range
❹
Group ROIC improved, but more work to do
❺
Operating cashflows strong, but continue to be impacted by legacy projects
1.Continuing operations
2.Before Significant Items
3.Excluding surplus property sales, EBIT Margin was 6.2% (FY25: 5.8%) and ROIC was 4.7% (FY25: 4.1%)
6
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
EBIT
1,2
$414m
$85m higher than FY25
Net
Debt
$637m
vs $999m FY25
ROIC
1,2,3
5.3%
vs 4.1% at FY25
Capital
Expenditure
$288m
vs $280m FY25
Revenue
1
$6.0b
7.3% higher than FY25
EBIT Margin
1,2,3
6.9%
vs 5.9% FY25
Net Earnings
$228m
vs -$419m net loss FY25
Net Cash from
Operating Activities
$715m
vs $501m FY25
FY26 financial summary
7| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Turnaround plan
FY26 delivered on portfolio simplification, providing a platform for future ROIC improvement
ImplementedFuture
Australian and Steel divisional
restructure
Group IT restructure
Group-wide SAP rollout stopped
Initial phase of corporate cost out
and decentralisation restructure
Completion of NZICC, and legacy
projects provisioned
Golden Bay Cement long-term
domestic manufacturing secured
Simplified capital structure and
USPP exit
Construction Division divested
Reinforcing & Wire divested
NX2 and CSP divested
Property portfolio optimisation
(Cheltenham, Felix St, Elizabeth)
MADE by Laminex shut down
Clever Core shut down
Frame & Truss repurposed to former
Clever Core site (~$100m cash benefit)
Stopped industrial land development
Assess and execute on growth
options inside core divisions
Continue to assess wider portfolio
for strategic fit and ROIC
performance
Complete strategic review of
Residential & Development
Further decentralise corporate
functions and drive lower costs
Reset dividend policy as free cash
flow and balance sheet targets are
met
FY26 operational highlights
▪PlaceMakers’ new Cavendish Drive Frame & Truss plant now
operational
▪Firth new flagship Auckland batching plant opened in Penrose - a
significant investment in Auckland’s ready-mix capacity
▪The Urban Quarry opened a new site in Tamahere, improving
cleanfill options for Waikato construction projects, with total
tonnage growing 28% YoY and cleanfill growing 35% YoY
▪Winstone Aggregates Hunua Quarry fast track expansion lodged
▪Fletcher Insulation AU successfully delivered the new Sonata
Acoustics plant, establishing a platform for future growth in the
higher-value acoustic solutions market
▪Iplex NZ recycling programme has diverted more than 15,000
tonnes of pipe off-cuts from landfill, reinforcing the business's
circular economy ambitions
▪Iplex AU successfully commissioned a new PVC high speed foam
core line in Strathpine, and additional large bore BlackMax
capacity in Albury
▪Laminex AU improved performance through a disciplined cost-out
programme spanning logistics, network, labour, raw materials and
overheads
| FY25 Results Presentation | 20 August 2025 | Fletcher Building Limited8
Update pic
8| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Operating
performance
Andrew Reding, Managing
Director & CEO
FY26 divisional performance
Improvement in core manufacturing performance; however, ROIC remains below acceptable levels
10
Light
Building Products
Heavy
Building Materials
DistributionResidential
Development
(Land Sales)
Gross revenue
1
$2,305m
10% from $2,089m
$2,033m
4% from $1,950m
$1,577m
3% from $1,528m
$478m
13% from $550m
$121m
$7m in FY25
EBIT (ex Sig Items)
1
$246m
22% from $201m
$108m
8% from $100m
$12m
37% from $19m
$42m
21% from $53m
$52m
$3m in FY25
EBIT margin (%)
10.7%
110bps from 9.6%
5.3%
20bps from 5.1%
0.8%
40 bps from 1.2%
8.8%
80 bps from 9.6%
-
ROIC (ex Sig Items)
2
7.2%
130bps from 5.9%
5.1%
60bps from 4.5%
1.4%
60 bps from 2.0%
3.7%
120 bps from 4.9%
-
Invested Capital
(as at 30 June 2026)
$2,520m
9% from $2,306m
$1,508m
2% from $1,545m
$646m
3% from $628m
$811m
13% from $718m
-
1. Excl. corporate costs and Group eliminations; 2. ROIC calculated on a 12m rolling basis
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
$
Light Building Products
Additions & Alterations volumes offset weaker North Island new build activity
11
Note: 1. Winstone Wallboards: Domestic board volumes (m
2
); Laminex NZ, Laminex AU: Domestic laminate sales (m3); Comfortech,
Fletcher Insulation: Glasswool sales volume (tonnes); Iplex NZ: Plastic pipe volumes (tonnes); Iplex AU: Plastic pipe and other sales
volumes (tonnes); Waipapa: Total sales volumes (m3)
•
Winstone Wallboards volumes +4%, led by a
strong South Island market (+11%),
renovation activity and specialty board
volume growth
•
Laminex AU domestic volumes +6%, led by
renovation segment growth of ~10%
•
Laminex NZ revenues were +6% on strong
South Island activity, particularly across low-
pressure laminate
•
Iplex NZ and AU offset supply chain
disruptions through disciplined pricing and
fulfilment. Iplex NZ rural and South Island
demand remained strong
•
Insulation businesses’ performance was
underpinned by manufacturing efficiency
and increased plant output
•
Waipapa Pine benefitted from internal
portfolio leverage and higher sawmill output
PRODUCT VOLUMES
1
Rolling 12m average quarterly volumes, Q4 FY19 = 100
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
50
60
70
80
90
100
110
120
130
140
Winstone WallboardsLaminex NZIplex NZComfortech
WaipapaLaminex AUIplex AUFletcher Insulation
Heavy Building Materials
Improved contribution from Steel businesses
12
•
Winstone Aggregates saw a strong
improvement in 2H driven by key project
wins and market share growth in The Urban
Quarry
•
Firth gained market share, benefitting from
long-term customer relationships, while
margins benefitted from lower energy costs
•
Improved volumes in Humes benefitted
from cross-sell opportunities, as part of the
larger Concrete vertical
•
Steel performance improved in 2H,
generating ~$10m of EBIT
1
in the half. Whilst
not generating an acceptable return, the
steel businesses continued to outperform
the broader market
•
ROIC below acceptable levels, with 5.1% for
the Division and 2.2% for Steel businesses
PRODUCT VOLUMES
2
Rolling 12m average quarterly volumes, Q4 FY19 = 100
50
60
70
80
90
100
110
120
130
140
Winstone AggregatesGolden Bay CementHumes
Firth (Ready-mix)Firth (Masonry)Easysteel
DimondColorCoteStramit
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Note: 1. Before Significant Items
2. Winstone Aggregates: Aggregates sales volumes (tonnes); Golden Bay Cement: Domestic cement volumes (tonnes); Firth: Ready
mix volumes (m3); Firth: Masonry volumes (m2); Humes: Concrete pipe volumes (tonnes); Easysteel: volumes
(tonnes), restated to exclude wire; Dimond: Dimond volumes (tonnes); ColorCote: local volumes (tonnes); Stramit:
Sales volumes (tonnes)
Earnings improved through higher export sales and domestic share
growth at ColorCote, alongside market share gains at Dimond
Distribution
13
•
Weak trading in 1H FY26 amidst sustained
margin pressure in response to a market
slowdown. Performance materially improved
in 2H, delivering $15.8m of EBIT in the half
•
South Island market continued to
outperform, while North Island remained
subdued
•
Frame & Truss volumes improved, internal
production grew 27%. Reduction in
outsourcing enabled improved efficiency
(direct cost per m
3
was 7.3% lower vs pcp)
•
New Frame & Truss site at Cavendish Drive
operational, increasing capacity to support
the Auckland market. The plant provides a
~40% uplift in finished product output per
direct labour hour
•
Successfully relaunched JVs in rural areas,
commencing with four branches in Southland
•
ROIC decreased to 1.4% due to lower FY
earnings and was below acceptable levels
PLACEMAKERS FRAME & TRUSS PRODUCT VOLUMES
1
Rolling 12m average quarterly volumes, Q4 FY19 = 100
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Returned to profitability in 2H FY26
Note: 1. Frame & Truss sales (m3)
50
60
70
80
90
100
110
120
130
140
•
536 units taken to profit in FY26 compared
to 666 in FY25 (-130 units)
•
EBIT
1
$42m (vs $53m FY25); 8.8% EBIT
margin (80 bps lower vs FY25), impacted by
lower sales
•
Auckland impacted by elevated market
inventory and price pressure
•
Canterbury remained resilient, with
supportive population growth and pricing
trends
•
Previously contracted land settlement
payments were $236m in FY26. Going
forward, settlements are expected to be
~$110m in FY27 (1H27: $75m), and ~$37m
in FY28
Residential & Development
Subdued property market impacted sales volumes
14
RESIDENTIAL & DEVELOPMENT HOUSE SETTLEMENTS
12mth volumes
2
666
836
670
617
886
666
536
FY20FY21FY22FY23FY24FY25FY26
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Note: 1. Before Significant Items, excluding Group surplus property sales; 2. Residential & apartment units taken to profit
Our stakeholders
Andrew Reding,
Managing Director & CEO
•In July 2025, we tragically lost one of our colleagues, Max, in a
fatal event in Vanuatu (Construction Division). Our thoughts
remain with his family and colleagues, and the safety and
wellbeing of our people continues to be our highest priority
•Since resetting Protect nearly sevenyears ago, we have seen a
90% reduction in serious injuries (down from an average of 24 a
year to two) and a 50% reduction in our recordable injuries
(down from an average of 300 to 150 p.a.)
•All sites have been assessed for their safety performance and
cultural maturity to ensure visibility by leadership of all sites, with
plans put in place for each site
•In FY27, we will be reviewing and refreshing our Protect
framework – in particular our Safety Leadership Programme and
our Critical Risk Framework
Our safety
Refreshing our commitment to Protect
16
SERIOUS INJURIES
As at 30 June 2026
TRIFR
Total Recordable Injury Frequency Rate, as at 30 June 2026
CRITICAL RISKS (% CONTROLLED)
As at 30 June 2026
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
2
4
1
2
FY25FY26
Including ConstructionExcluding Construction
2.9
3.3
3.1
3.7
FY25FY26
Including ConstructionExcluding Construction
70%
79%
73%
81%
FY25FY26
Including ConstructionExcluding Construction
Senior leader engagement
Focus on leadership
development and strategy
communication has seen GM
engagement lift. In April 2026,
eNPS reached +59, reflecting an
increase of 21 since October
2025, in the upper quartile
against external benchmarks.
This represents the strongest
uplift at any job level.
Stronger GM engagement
supports leadership continuity
and reduces succession risk
across the business
17
Employee Education Fund (EEF)
The EEF continues to invest in
our people to develop the skills
that will support our businesses
to perform.
This includes leadership
development to support talent
pipelines and succession
planning; programmes that
continue to build diversity,
particularly in leadership; and
training to build skills and
capabilities across our
businesses
Continuing to grow diversity
Fletcher Building continues to
show clear progress towards a
more inclusive workplace.
Women now make up 25.1% of
the workforce and 23.7% of
leadership roles, with
improvements in pay parity,
retention and engagement.
This work has created stronger
systems, leadership
accountability and talent
pathways that also widen
diversity outcomes
Reconciliation Action Plan
OurRAP commitments in
Australia are coming to life with
initiatives that celebrate culture
and connect with community.
These include supporting 70
First Nations children by
funding school resources, and
senior leaders giving their time
as mentors at local high
schools. We have also hosted
‘Work Inspiration Days’
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Our people
Targeted investment in leadership, skills and culture is lifting engagement and building capability to deliver our
strategy
Our community
18
Supporting the communities in which we operate
Fletcher Living Canterbury team
members swapped their desks for
the slopes of the Port Hills,
planting 300 native trees
inHorotaneValley as part of an
ongoing effort to help restore
Christchurch's natural landscape.
The initiative aims to restore
native forest to designated areas
across the Hills, with the team
returning throughout the year to
help maintain them.
Tukapa Rugby & Sports Club in
Taranaki has received a brand-
new roof. The project was a
result of a community
partnership led by Dimond
Roofing, alongside ColorCote,
Farnsworth Roofing, Cunningham
Construction, Bremick, and
Lifestyle Building & Construction.
Meals for the Mob provides free,
healthy meals to First Nations
families, community groups and
services experiencing food
insecurity. Working from the
Abbotsford kitchen alongside
FareShare and SecondBite
volunteers - Fletcher Insulation,
Stramit, Iplex and Laminex staff
contributed over 2,000 meals for
the community.
For many years, the Mico team,
together with our customers,
suppliers and partners, has
supported Make-A-Wish.
We've helped raise over
$450,000, helping to grant life-
changing wishes to children living
with critical illnesses.
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Our customers
We’re proud of the products and people helping our customers build their future
19
Pipes for Queenstown
Frankton Track project
The Iplex Ashburton team
successfully produced the largest
pipe ever to come off the site’s line
- a milestone moment for the
business and for the Queenstown
Lakes District Council’s Frankton
Track Wastewater project. In a first
for the site, the team completed a
full production run of a 710PN16
pipe, the biggest diameter and
heaviest wall thickness the line is
capable of handling
Laminex Calm & Cohesive finishes
chosen for flagship clinic
Designing Auckland Radiology’s
new patient-centred clinic,
specialist architects Klein designed
a healthcare interior that counters
anxiety and feels warm and
familiar. Across Laminex’s
integrated Formica and Melteca
collections, the designers had
access to the coordinated finishes
needed for a healthcare interior
where ambience matters as much
as hygiene
PlaceMakers PLUS
PlaceMakers launched its new
customer loyalty programme in
February 2026, designed to
strengthen customer relationships.
This marks the biggest evolution of
the PlaceMakers loyalty offering to
date. PlaceMakers Plus is now
integrated into the PlaceMakers
Trade Portal and Trade App, where
customers can view their points
balance, tier status and other
benefits
Iplex Ashburton pipes up with biggest job yet
Firth mobilises mobile plants for
two major wind farms
Firth continues to set the standard
in supplying concrete to New
Zealand’s most remote sites,
deploying four mobile plants for
two major wind farm projects:
Kaiwera Downs - 15 km southeast
of Gore, and Kaiwaikawe - 12 km
northwest of Dargaville.
Both projects are being
constructed by Higgins for Mercury
Energy
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Calm & Cohesive Laminex Finishes Feature in ARG’s Flagship
Clinic by Klein
Dimond is helping deliver a New
Zealand first, supplying the high-
performance roofing and wall
cladding systems
forTeUnuaMuseum ofSouthland,
thelandmark Invercargill
development on track to become the
country's first Green Star-certified
museum
Iplex AU - driving efficient urban
infrastructure delivery
Delivery of essential sewer
infrastructure for the expanding
Flagstone community near
Brisbane with SewerMax gravity
sewer system. Combining
durability, ease of installation, and
long-term corrosion resistance,
SewerMax helped improve
construction efficiency while
providing a reliable, future-ready
network to support ongoing
population growth and urban
development
Our environment
20
Note: 1. Scope 1 & 2 Emissions (market-based method); 2. Based on published Environmental Product Declarations (EPDs)
Supporting our local environment and improving our operational sustainability
Leadership
A-
Supplier
Engagement
A
ESG Rating
AAA
ESG Rating
71
ESG Rating
B
ESG Rating
4.5
Carbon emissions
21%
lower
vs FY18 baseline
1
76%
of revenue from
Sustainably
Certified Products
86%
of waste diverted
from landfill
Golden Bay Cement also
received the Carbon
Reduction Award at the
2025 Concrete NZ
Conference Awards. GBC
produces NZ’s lowest carbon
general-purpose cement,
~15%-20% lower than
imported alternatives
1,2
Golden Bay Cement
supported the re-
introduction of around 450
wētāpunga (giant wētā) to
Matakohe Limestone Island,
in partnership with local iwi,
community groups and
conservation organisations
Urban Quarry opened a
new site in Tamahere,
offering managed and
cleanfill solutions to
clients in the central
North Island. Urban
Quarry throughput over
250k tonnes of cleanfill
in FY26 (+35% YoY)
Comfortech has
partnered with
Lodestone Energy to
match 100% of electricity
used at Penrose site with
solar generated
renewable energy
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Financial
Results
Will Wright, CFO
INCOME STATEMENTJUNE 2026JUNE 2025
NZ$m12 MONTHS12 MONTHS
Revenue5,9945,587
Cost of goods sold(4,060)(3,800)
Gross margin1,9341,787
Warehouse and distribution expenses(643)(583)
Selling, general and administration expenses(885)(878)
Operating margin 406326
Share of profits of associates and joint ventures1510
Other income/(expenses)(7)(7)
EBIT before Significant Items414329
Significant Items(41)(565)
EBIT373(236)
Lease interest expense(61)(62)
Funding costs(64)(93)
Taxation (expense)/benefit (41)63
Net earnings attributable to non-controlling interests(8)(2)
Net earnings/(losses) from continuing operations199(330)
Net earnings/(losses) from discontinued operations net of tax29(89)
Net earnings/(losses) attributable to the shareholders228(419)
Earnings/(losses) per share, cents 21.2(41.4)
Earnings/(losses) per share from continuing operations, cents 18.5(32.6)
22
Income statement for continuing operations
•Revenue increased 7.3% vs pcp, with improved volumes
across the core manufacturing and distribution divisions
•Continuing operations EBIT before Sig. Items increased to
$414m. Core manufacturing and distribution divisions
improved $46m, including a $6m FX benefit
•All continuing operations business units were profitable on an
EBIT basis in 2H FY26
•Net gain from discontinued operations reflected the gain on
the sale of the Construction division, partially offset by
additional provisions for retained legacy contracts and
impairments, and valuation reductions relating to other
businesses held for sale
•Group earnings per share of 21.2c were positive for the first
time since FY23
Core manufacturing and distribution divisions’ EBIT improved $46m; first positive EPS since FY23
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
23
Note: 1. Excludes benefit of intercompany funding
Discontinued operations
FINANCIAL PERFORMANCE & CASHFLOW
NZ$m
JUNE 2026
12 MONTHS
Revenue
1,048
Cost of goods sold
(915)
Gross margin
133
Selling, general and administration expenses
(106)
Operating margin
27
Other income/(expenses)
2
Revaluation gains/(losses)
(12)
Significant Items
1
Earnings before interest and taxation (EBIT)
18
Lease interest expense
(8)
Funding costs
(9)
Income tax benefit
28
Net earnings/(losses) from discontinued operations net of tax
29
Earnings/(losses) per share (cents)
2.7
Net cash inflow/(outflow) from operating activities
64
Net cash inflow/(outflow) from investing activities
2
Net cash inflow/(outflow) from financing activities
1
(42)
Net movement in cash generated by discontinued operations
24
•New Zealand construction businesses were sold to VINCI
(completed 29 May 2026)
•Remaining South Pacific construction operations: Fiji JV sold on
14 May 2026 and remaining Vanuatu & Kiribati construction
operations are classified as discontinued
•Residual legacy vertical construction liabilities are presented
within discontinued operations as the Group completes the
wind-down of its vertical construction business
•Fletcher Reinforcing & Wire transaction expected to close in Q1
FY27
•The Group is actively progressing the divestment of its Vivid
Living retirement village operations. At 30 June 2026, the Board
assessed that Vivid met the requirements to be classified as
held for sale
The Construction division, Reinforcing & Wire and Vivid businesses have been presented as discontinued operations
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
24
FY26 Significant Items
•Significant Items from continuing operations include:
•Winstone Wallboards remaining costs associated with previously announced exit
from two distribution centres
•Laminex NZ costs associated with establishing operations at the new OSB facility
•Iplex Pipelines Australia legal costs
•Laminex Australia costs related to the closure and restructure of the sold
Cheltenham property, as well as the reorganisation and exit of the Monkland site
•Laminex Australia silicosis-related claims based on a reassessment of existing and
potential claim numbers, alongside additional legal costs
•Residential & Development recognised a partial recovery of previously incurred
restructuring costs and released related provisions
•Corporate $2m of additional onerous costs identified, relating to surplus SAP licence
commitments, as well as $4m of divestment costs.
•Significant Items from discontinued operations. $1m net gain from the divestment of
the Construction division, offset by additional provisions related to legacy construction
projects, NX2 divestment, Papua New Guinea closure, South Pacific Fiji JV divestment,
CSP Pacific, write-down and provisions related to the sale of Fletcher Reinforcing and
the potential sale of Vivid Living
Total Group Significant Items of ($40m) in FY26, relating to legal costs, restructure and start-up of new facilities
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
SIGNIFICANT ITEMS
NZ$m
FY26
Total from continuing operations
(41)
Light Building Products
(36)
Iplex AU Western Australia pipes legal costs(10)
Laminex AU Cheltenham and Monkland site exits
(11)
Laminex AU silicosis-related claims(7)
Laminex NZ Taupō start up and transition costs(6)
Winstone Wallboards property rationalisation and prior
disposal matters
(2)
Residential & Development1
Corporate(6)
Total from discontinued operations
1
Total Significant Items
(40)
25
FY25 to FY26 EBIT bridge
Improvements in volume, pricing and tight cost control resulted in EBIT
1
improvement
GROUP EBIT BRIDGE FY25 to FY26
$m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
383(54)
9338
75
13(26)
(23)
49(12)
414
FY25 GroupDiscontinued
Operations
ClevercoreFY25 Continuing
Operations
(excl.
Clevercore)
VolumePriceResidentialNet Overhead
Cost Inflation
Surplus Property
Land
Sales
OtherFY26 C ontinuing
Operations
Note: 1. Excluding Significant Items
26
Balance sheet
BALANCE SHEET
NZ$m
30 JUNE 202630 JUNE 2025
Inventories
1,8301,905
Debtors
831849
Creditors
(984)(1,202)
Other Working capital
(419)(345)
Property, plant and equipment and investment property
2,2822,349
Indefinite life intangible assets
653656
Other Intangible assets
2347
Investments
216218
Retirement plan assets
148150
Right-of-use lease asset
9841,246
Deferred tax liability - brands
(64)(63)
Derivatives for foreign currency hedging
(5)(8)
Current tax balances
2029
Net Position held for sale
1
300
Invested Capital
5,5455,831
Right-of-use lease liability (incl. those classified as held for sale)
(1,240)(1,497)
Funds
4,3054,334
Deferred tax balances (excl. deferred tax on brands)
289272
Carrying value of borrowings
(789)(1,172)
Value of hedge derivatives
034
Cash and cash equivalents (incl. those classified as held for sale)
152139
Group Equity
3,9573,607
•Invested capital decreased by $286m (-5%) vs FY25. This
included an increase of $142m driven by movement in
NZD/AUD FX rates
•Right-of-use assets and lease liabilities reduced by
~$262m, of which ~$131m was due to divestments
•Working capital in Residential & Development increased vs
pcp, reflecting payments to settle deferred land purchases
and joint venture profit-share arrangements, largely offset
by lower build and land stock on hand
•Working capital days across the core manufacturing and
distribution divisions were broadly in line with FY25
•Provisions increased by $75m, which included $60m in
relation to ~15 retained legacy projects following the
divestment of the Construction division
Disciplined capital allocation and divestment proceeds improve balance sheet resilience
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Note 1: Adjusted for cash and cash equivalents ($7m) and right-of-use lease liabilities $5m
27
1. Before Significant Items
Cash flows
CASH FLOWS
NZ$m
JUNE 2026
12 MONTHS
JUNE 2025
12 MONTHS
Cash flow from operating activities
Receipts from customers6,9757,311
Receipts from residents (new ORAs)1727
Payments to suppliers, employees and other(6,279)(6,837)
Net income tax refunded2
Net cash from operating activities715501
Cash flow from investing activities
Sale of subsidiaries and investments296174
Acquisition of subsidiaries-(1)
Investment in joint ventures and associates(3)(4)
Dividends & interest received 1422
Sale of property plant and equipment2056
Purchase of property plant and equipment and intangible assets(288)(280)
Investment in mining, consenting and stripping(24)(16)
Payments for investment property and development(5)(12)
Net cash from investing activities10(61)
Cash flow from financing activities
Funding costs (expensed & capitalised)(96)(129)
Lease principal & interest paid(264)(261)
Net non-controlling contributions/(distributions)(8)37
Net issue/(repurchase) of shares-679
Net drawdown/(repayment) of borrowings & capital notes(365)(938)
Net cash from financing activities(733)(612)
Net movement in cash held(8)(172)
•Operating cash flow improved by $214m vs pcp, reflecting
higher earnings across the core operations, land sale
proceeds and lower Construction legacy cash outflows
•Operating cashflows on a normalised basis were $707m if
you exclude $64m of inflows from discontinued operations
and $56m of outflows relating to legacy matters
•Net cash proceeds from divestments were $296m. Final
working capital adjustment for the Construction divestment
is expected to complete in 1H FY27
•Capital expenditure
was $288m, of which the new Laminex
OSB plant was $146m
•Funding costs of $96m, including $9m of debt restructuring
fees, were down on pcp $129m, which included $11m of
debt restructuring fees
•Net debt reduced from $999m at 30 June 2025 to $637m at
30 June 2026
Improved operating cash of $715m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
28
Note: 1. Divisional central costs include both Group recharges and direct costs incurred at a divisional level
Central costs
•Gross Group corporate and divisional costs declined vs FY25
following continued cost discipline, restructure and
decentralisation
•Technology costs decreased, driven by decentralisation of
Group IT functions, more efficient use of licenses and
reduced project work
•Corporate overheads were reduced, as we continued to
simplify how we run the business
•Discontinued operations costs were ~$17m at the Group
level and ~$26m at the divisional level
•The Group remains focused on further reduction of
corporate overheads and simplification over time
Group central costs reduced by 21% on a continuing operations basis, pre recharge
CENTRAL COST SUMMARY
NZ$m
JUNE 2026
12 MONTHS
JUNE 2025
12 MONTHS
ContinuedDisc.TotalContinuedDisc.Total
Group
Technology
731285 9113104
Corporate overhead costs
2702742042
Property & Penrose campus
1011111213
Other Group central costs (legal,
payroll and other)
1842216521
Digital@Fletcher project costs
000101
Other income
(1)0(1)(1)0(1)
Group central costs
(pre-recharge)
12717144 16020180
Group recharges
(81)(17)(98) (109)(20)(129)
Net Group corporate costs
46046 51051
Division
1
Divisional central costs
(pre-recharge)
242650263459
Division recharges
(6)(17)(23) (13)(21)(34)
Net Divisional corporate costs
18927 131225
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
148
138
110
146
22
4
0
50
100
150
200
250
300
FY25FY26
Divested
OSB
Capital expenditure
(excl OSB)
Capital expenditure and stripping
Lower levels of capital expenditure expected as we move towards being a more disciplined capital allocator
29
•$288m capital expenditure in FY26 vs $280m in FY25
•Majority of previously committed large projects have
become operational: PlaceMakers Frame & Truss, Firth 882
Great South Road batching plant
•OSB plant is expected to become operational in 1H FY27
•Divested operations accounted for $4m of capital
expenditure in FY26
•Investment in quarry consenting and stripping was $24m in FY26
($16m in FY25), less than previously indicated due to the timing
of quarry land settlements
•Capital expenditure for FY27 is expected to be ~$170m, including
~$40m for OSB. In addition to this, ~$30m is expected to be spent
on stripping and quarry land acquisitions
•Consistent with a shift to a more capital-disciplined, cash-focused
business, the FY27 capital expenditure profile reflects a material
step-down on the prior year, with the Group having spent ~$2bn
during the period FY21 to FY25
CAPITAL EXPENDITURE BREAKDOWN
$m, excluding investment property and development and mining, consenting, and stripping
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
$288m
$280m
90
40
33
200
555
325
300
8
FY27FY28FY29FY30FY31+
Capital Notes
Bank Loans
Other
98
240
588
300
325
90
40
33
1,004
305
325
8
FY27FY28FY29FY30FY31+
Capital Notes
Bank Loans
Other
Funding mix
Continued progress on moving to a simpler lower-cost capital structure
30
Note: 1. Excludes line fees on undrawn facilities
TOTAL FACILITIES MATURITY PROFILE
As at 30 June 2026, $m
98
1,044
338
Current Group position
•Undrawn credit lines of $1bn as at 30 June 2026; total liquidity of ~$1.2bn
•FY28 maturities are reflective of a transitional capital structure and their
refinancing is underway
•Average interest rate on debt is 6.1% including line fees
1
•Group gearing after hedging was 15% at 30 June 2026 (22% at June 2025)
Refinance
•The new maturity profile will be in place shortly and can be seen in the
chart on the lower left
•Post refinance, weighted average maturity is targeted to increase from 1.6
to 2.6 years as of September 2026
Debt cancellation & redemption
•$200m 2-year bank liquidity facility established in 1H FY26 cancelled on
receipt of Construction sale proceeds
•$55m capital notes redeemed in March 2026
Credit rating
•At Fletcher Building’s request, Moody’s withdrew its credit rating effective
25 June 2026. Fletcher Building remains committed to maintaining metrics
consistent with an investment-grade credit rating
325
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
POST REFINANCE MATURITY PROFILE
Targeted maturities at 30 September 2026, $m
31
Net Debt bridge
$362m reduction driven by divestments and property sales
NET DEBT (30 June 2025 – 30 June 2026)
$m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
999(771)
58
320
7
74
(8)
(380)
264
96(22)
637
FY25
Net Debt
EarningsSig Items & Legacy
Cash
Capital
Expenditure,
Investments and
Stripping
Group Working
Capital (ex R&D)
R&D Working
Capital
Construction
Working Capital
Proceeds from
Divestments &
Surplus Property
Land Sales
Lease principal &
interest paid
Funding CostsOtherFY26
Net Debt
Outlook
Andrew Reding, Managing
Director & CEO
Update Image
Tailwinds and Headwinds
33
● Positive; ● Mixed; ● Negative
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Residential
49% revenue exposure
Commercial
13% revenue exposure
Infrastructure
7% revenue exposure
NZ
House prices remained under near term
pressure, with inventory levels high.
Impact on new build activity uncertain.
Robust additions and alterations activity
NZ weak business investment and
economic uncertainty continue to
constrain demand
Supportive, with civil construction, roads
and bridges continuing. Timing for new
projects remain uncertain
Residential
20% revenue exposure
Commercial
7% revenue exposure
Infrastructure
4% revenue exposure
AU
Population growth and underlying
housing demand provide support,
however, activity is pressured by
elevated interest rates and affordability
Business investment is expected to grow,
with the focus on data centres
Strong pipeline, spanning all sectors,
including transport, energy, water
and Olympic facilities
Positive; ( ̶ ) Mixed; Negative
Outlook
34| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
•Market volumes recovered gradually through the second half of FY26, with some demand likely brought forward ahead
of pricing increases
•The economic, political and geopolitical backdrop remains uncertain and is expected to weigh on performance in the first
half of FY27
•Heightened levels of NZ consenting reflect pent-up demand that should be realised, however, timing remains uncertain
•A meaningful recovery in underlying volumes is not expected until calendar year 2027
Update picture
Conclusion
Andrew Reding, Managing
Director & CEO
Conclusion
36
❶
Steady performance in a tough macro environment
❷
Progressed the execution of our strategy
❸
Resilient balance sheet, with net debt in target range
❹
Group ROIC improved, but more work to do
❺
Operating cashflows strong, but continue to be impacted by legacy projects
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Appendix
Update picture
38
Note: 1. Before Significant Items
•A leading building materials
manufacturer and distributor across
New Zealand and Australia
•NZX and ASX listed (FBU), with market
cap of ~NZ$4bn
•FY26 Revenue of $6.0b and EBIT
1
of
$414m (continuing operations)
•Operates through a portfolio of 19 core
business units, which employ 9,000+
people across Australia and New Zealand
Fletcher Building at a Glance
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Light Building Products
12 months ended
30 June 2026
Change from 12 months ended
30 June 2025
Gross revenue$2,305m
10% from $2,089m
External revenue$2,118m
12% from $1,895m
Gross margin$868m
11% from $784m
Overheads$631m
7% from $589m
Operating margin$237m
22% from $195m
EBIT before Significant
Items
$246m
22% from $201m
EBIT margin before
Significant Items
10.7%
110 bps from 9.6%
Significant Items$36m
n/m
From $324m
Invested Capital$2,520m
9% from $2,306m
ROIC (excl Sig Items)7.2%
130 bps from 5.9%
Capital expenditure &
Investments
$210m
32% from $159m
•
Winstone Wallboards: strong earnings supported by robust South
Island demand and improved operational performance, particularly at
the Tauranga plant, with A-grade board recovery up 2%
•
Laminex AU: EBIT margin expanded 40bps to 7.3%, assisted by a cost-
out programme. Digital channels reached 55% of traded revenue
•
Laminex NZ: share gains in core categories. Transition to the new OSB
facility is a key priority for FY27
•
Waipapa Pine: returned to profitability, driven by price recovery,
favourable product mix, volumes and operational improvements.
•
Comfortech: PinkFit retrofit model launched to serve residential
retrofit and energy-efficiency market. Higher production volumes
(+18%), and an 11% reduction in conversion costs
•
Fletcher Insulation AU: underlying EBIT increased 8.5% (excl. Sonata
Acoustics start-up). Glasswool manufacturing costs reduced by 3%
•
Iplex NZ: volumes increased 25%, driven by the rural sector, South
Island and increased geopolitically-driven demand. Working capital
cycle improved by 22 days
•
Iplex Australia: delivered $1.1m of savings despite an inflationary
cost environment
•
Oliveri: returned to profitability through disciplined margin
management
39| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Heavy Building Materials
40
12 months ended
30 June 2026
Change from 12 months ended
30 June 2025
Gross revenue$2,033m
4% from $1,950m
External revenue$1,719m
4% from $1,646m
Gross margin$521m
5% from $495m
Overheads$416m
7% from $389m
Operating margin$105m
1% from $106m
EBIT before Significant
Items
$108m
8% from $100m
EBIT margin before
Significant Items
5.3%
20 bps from 5.1%
Significant Items-
n/m
$83m
Invested Capital$1,508m
2% from $1,545m
ROIC (excl Sig Items)5.1%
60 bps from 4.5%
Capital expenditure &
Investments
$79m
13% from $91m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
•Winstone Aggregates: annual volumes impacted by a weaker 1H, with
partial 2H recovery driven by key project wins and The Urban Quarry.
Operating and overhead cost reductions protected margins alongside
continued price discipline
•Golden Bay: resilient performance, with earnings growth through
improved manufacturing cost performance (particularly energy) and
supply chain efficiency
•Firth: volumes up 2% vs pcp with share growth. Costs in line with
expectations
•Humes: 2H volumes recovered and were 6% ahead of pcp through
market share growth driven in part by the opening of three new
branches in Westgate, Drury and North Christchurch
•ColorCote: robust performance with increased production volumes
through higher export sales and domestic share growth driving
productivity improvements and offsetting continued margin pressure
•Dimond: volumes up 17% vs pcp driven by market share and strong
uptake of new products. Pricing environment remains competitive
•Easysteel: earnings improved on the prior year, supported by higher
volumes (up 4% vs pcp) and improved gross margins
•Stramit: volumes 2% ahead of pcp coupled with good operational
discipline and cost control. Market share stabilised following improved
customer service and DIFOTIS focus from new management team
Distribution
41
12 months ended
30 June 2026
Change from 12 months ended
30 June 2025
Gross revenue$1,577m
3% from $1,528m
External revenue$1,557m
4% from $1,504m
Gross margin$393m
3% from $381m
Overheads$382m
6% from $361m
Operating margin$11m
45% from $20m
EBIT before Significant
Items
$12m
37% from $19m
EBIT margin before
Significant Items
0.8%
40 bps from 1.2%
Significant Items-
n/m
$32m
Invested Capital$646m
3% from $628m
ROIC (excl Sig Items)1.4%
60 bps from 2.0%
Capital expenditure &
Investments
$19m
17% from $23m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
•The residential construction market improved year on year in 2H
FY26, although margins remain constrained as activity is still at
historically low levels, leaving excess capacity in the market
•The lower South Island continues to outperform, while activity in
northern regions remains subdued
•PlaceMakers: revenue up on FY25 with a stronger 2H across the
market and a modest gain in market share. Frame & Truss activity
increased, providing a strong revenue base, while flat margins
reflect a competitive but stable market
•Mico: the plumbing supplies market improved versus pcp, with
market share gains lifting revenue. Margins remained constrained
in a highly competitive market, but the higher revenue drove
improved profitability
•An improved 2H for Distribution, with better market conditions
and share gains lifting revenue vs pcp. However, earnings remain
well below FY25, and the division's key focus is margin recovery
and cost management
Residential & Development
42
•536 units Taken To Profit (TTP) in FY26 (incl. 15 apartments), 130
units lower vs FY25
•Development mix transitioned during the year, impacting volumes
and margin
•EBIT before Sig. Items $42m, -$11m vs pcp; with lower volume and
price pressure partly mitigated through significant build cost
reduction and disciplined overhead control
•Invested capital increased by $93m vs June 2025 (inclusive of $236m
of pre-committed land purchases)
•Land development / property sales contributed $52m towards Group
EBIT before Significant Items
Residential112 months ended
30 June 2026
Change from 12 months ended
30 June 2025
Gross revenue$478m
13% from $550m
External revenue$478m
13% from $550m
Gross margin$96m
19% from $118m
Overheads$54m
19% from $67m
EBIT before Significant
Items
$42m
21% from $53m
EBIT margin before
Significant Items
8.8%
80 bps from 9.6%
Significant Items$(1)m
n/m
$10m
Invested Capital$811m
13% from $718m
ROIC (excl Sig Items)3.7%
120 bps from 4.9%
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Land/Property Sales12 months ended
30 June 2026
Change from 12 months ended
30 June 2025
EBIT before Significant
Items
$52m
n/m
$3m
43
Note:
* Comparatives have been reclassified to reflect intra-group sales between continuing operations and Construction Division (discontinued operation), resulting in a gross-up of external revenue and cost of goods sold in continuing
operations and corresponding eliminations within discontinued operations, with no impact on total Group results.
+ Comparatives have been represented, refer to note 2.1.
1. Overheads reflect warehouse, distribution, selling, general and administrative expenses.
2. Other income/(expenses) include restructuring and redundancy costs; costs associated with Golden Bay Cement®’s MVAC ship breakdown in FY25; gains/losses from the disposal of assets; and proceeds from the disposal of NZ
ETS units.
3. Revaluation gains include gains recognised from the remeasurement of Vivid Living®'s investment properties at each reporting date.
Divisional breakdowns
NZ$m
Gross
Revenue
External
Revenue*
Gross
Margin*
Overheads
1
Operating
Margin
Other
income /
(expense)
2+
Equity
Accounted
Earnings
Reval
3
and
other gains
/ (losses)
EBIT before
Sig Items
Sig Items
+
EBITDD&AEBITDAEBITDA
before Sig
Items
12 months to JUNE 2026
Light Building Products2,305 2,118 868 (631)237 (3)12 246 (36)210 127 337 373
Heavy Building Materials2,033 1,719 521 (416)105 3 108 108 119 227 227
Distribution1,577 1,557 393 (382)11 1 12 12 61 73 73
Residential & Development599 599 152 (54)98 (4)94 1 95 1 96 95
Corporate8 1 8 (53)(45)(1)(46)(6)(52)8 (44)(38)
Group eliminations(528)(8)8
Continuing operations5,994 5,994 1,934 (1,528)406 (7)15 414 (41)373 316 689730
12 months to JUNE 2025
Light Building Products2,089 1,895 784 (589)195 (1)7 201 (324)(123)119 (4)320
Heavy Building Materials1,950 1,646 495 (389)106 (9)3 100 (83)17 110 127 210
Distribution1,528 1,504 381 (361)20 (1)19 (32)(13)60 47 79
Residential & Development557 541 122 (67)55 1 56 (10)46 4 50 60
Corporate10 1 10 (64)(54)3 (51)(116)(167)15 (152)(36)
Group eliminations(547)(5)9 4 4 4 4 4
Continuing operations5,587 5,587 1,787 (1,461)326 (7)10 329 (565)(236)308 72 637
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
44
Note: 1. Upstream construction materials earnings are split approximately 68% / 32% between quarry earnings and cement earnings in FY26 (73% / 27% in FY25)
Divisional EBIT breakdowns
NZNZAUAU
Divisional EBIT (before Sig Items) (NZ$m)12 months to JUNE 202612 months to JUNE 202512 months to JUNE 202612 months to JUNE 2025
Wood & Panels
1201026052
Water
1042923
Insulation
1071718
Total Light Building Products EBIT (excl divisional costs)
14011310692
Upstream construction materials
1
7269--
Downstream construction materials
2429--
Steel
1264(0)
Total Heavy Building Materials EBIT (excl divisional costs)
1081044(0)
PlaceMakers
1325--
Mico
1(3)--
Total Distribution EBIT (excl divisional costs)
1422--
Fletcher Living
4262--
Development
11(1)414
Apartments & Clevercore
-(9)--
Total Residential & Development EBIT (excl divisional costs)
5352414
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
45
Divisional sector revenue exposures
Estimated Divisional breakdown (FY26)NZ ResidentialNZ CommercialNZ InfrastructureAU ResidentialAU CommercialAU Infrastructure
Wood & Panels
31%10%1%39%19%-
Water
10%1%10%33%4%41%
Insulation
14%14%-52%20%-
Total Light Building Products
24%8%3%39%16%10%
Upstream construction materials
39%22%40%---
Downstream construction materials
49%25%26%---
Steel
27%20%3%39%11%-
Total Heavy Building Materials
36%22%18%19%5%-
PlaceMakers
87%13%----
Mico
70%27%3%---
Total Distribution
84%16%1%---
Fletcher Living
100%-----
Development
100%-----
Apartments
100%-----
Total Residential & Development
100%-----
Group – continuing operations
49%13%7%20%7%4%
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Working capital performance
Working capital volatility has improved and is more in line with long-term averages (excluding R&D)
46
Note: 1. Average monthly change in trading cash for the period from FY19-FY25 accumulated over 12 months, Trading Cash is defined as net cash from operating activities, excluding income tax paid and including lease principal and
interest paid; 2. Excludes the Construction Division in Jun 2026
GROUP CUMULATIVE MONTHLY ∆TRADING CASH (INCL CONSTRUCTION)
1,2
(FY19 – FY26); $m
GROUP (ex CONSTRUCTION & R&D) CUMULATIVE MONTHLY ∆TRADING CASH
1
(FY19 – FY26); $m
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
(600)
(500)
(400)
(300)
(200)
(100)
0
100
200
JunJulAugSepOctNovDecJanFebMarAprMayJun
Cumulative average monthly ∆ (FY19-25)
Cumulative monthly ∆ (FY25)
Cumulative monthly ∆ (FY26)
(600)
(500)
(400)
(300)
(200)
(100)
0
100
200
JunJulAugSepOctNovDecJanFebMarAprMayJun
Cumulative average monthly ∆ (FY19-25)
Cumulative monthly ∆ (FY25)
Cumulative monthly ∆ (FY26)
177
439
348
379
154
221
562
206
134
112
0
100
200
300
400
500
600
<5 years5-10 years10-15 years15-20 years20+ years
FY25FY26
Management of lease portfolio
Reduction in lease liabilities, combined with a reduction in lease tenure
47
•FY26 lease liabilities were ~$1.2bn, representing ~61% of the Group’s gross
debt
•Lease terms were re-assessed and materially shortened across the Group,
resulting in a ~$126m reduction in continuing operations lease liabilities
•Divestment of Construction and other businesses led to a further reduction
of ~$131m
•In Continuing operations, land & buildings accounted for ~83% of leases
with plant & machinery accounting for the remainder (~17%)
WEIGHTED AVERAGE LEASE TERM (CONT. OPERATIONS)
As at 30 June 2026, $m, excluding lease liabilities held for sale
Lease Liabilities
NZ$m
As at
30 JUN 2026
As at
30 JUN 2025
Light Building Products(413)(432)
Heavy Building Materials(398)(466)
Distribution(367)(373)
Materials & Distribution(1,178)(1,271)
Residential & Development(1)(11)
Corporate & Other(53)(76)
Continuing operations(1,232)(1,358)
Discontinued operations(8) (139)
Group (incl. lease liabilities classified as held for sale)(1,240)(1,497)
Lease liabilities classified as held for sale5-
Group (excl. lease liabilities classified as held for sale)(1,235)(1,497)
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
48
Credit metrics
Credit metrics & covenants
JUNE 2026
12 MONTHS
JUNE 2025
12 MONTHS
Pre-IFRS 16 Net Debt
$637m
$999m
Senior Leverage Ratio (covenant 3.25x from FY26)
1.1x
1.6x
Senior Interest Cover Ratio (covenant 2.25x, moving to 2.75x in 2H27)
5.1x
3.9x
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Iplex Australia
House remediations and pipe replacements building momentum, no change to provisions
49
Note: 1. Pipe has been completely removed from the home
•Iplex Australia's Western Australia Industry Response continues to
progress within the A$155 million provision recognised in
November 2024, with A$31 million utilised to date
•Costs incurred to date under the Industry Response remain in line
with the provision and the underlying assumptions disclosed at 30
June 2025
•The Industry Response was launched in November 2024 and now
has 56 participating builders who are undertaking the agreed work
and remediation program (50 builders at 30 June 2025)
•As at 30 June 2026, 213 homes have been fully remediated, and
nearly 5,000 homes have had leak detector units installed
•While most major builders have agreed to participate in the
Industry Response, the Buckeridge Group of Companies (BGC),
which is responsible for constructing ~55% of the affected WA
homes, has not joined the Industry Response
•The provision includes allowances for homes built by BGC, as BGC
has the option to participate in the Industry Response at any time
Remediation
Completed as
at
31-Dec-24
Completed as
at
30-June-25
Completed as
at
31-Dec-25
Completed as
at
30-June-26
Leak detector
Installation
5922,0034,1884,987
Ceiling Pipe Replacement7329961,1761,385
Full Home Remediation
1
555149213
| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
•
Laminex Australia (together with other engineered stone
manufacturers, distributors, and fabricators in Australia) is the
subject of a number of silica-related personal injury claims in
Australia
•
Laminex Australia has settled the majority of claims that have
been brought against it to date
•
Laminex Australia contributed A$2.5m in FY26 (FY25: A$0.4m)
to claim settlements
•
Throughout FY26, the business continued to assess both the
existing claims pool, and the potential for additional claims
•
As a result, the provision has been increased by A$5.1m to
A$13.3m
Silicosis
~A$5m increase in Laminex provision to A$13.3m reflects the latest claims data and accounts for current and potential
undiagnosed cases
50| FY26 Results Presentation | 19 August 2026 | Fletcher Building Limited
Silicosis related provisionA$m
FY25 (30 JUN 2025) remaining provision10.7
FY26 Claims paid(2.5)
Additional provision recognised in FY265.1
FY26 (30 JUN 2026)13.3
CONTRIBUTIONS TO CLAIM SETTLEMENTS
A$m
1.5
0.4
2.5
FY24FY25FY26
---
Annual Report 2026
Fletcher Building Limited
This report and our previous reports and presentations
are available at www.fletcherbuilding.com.
Chair and CEO Letter 03
Financial Statements 05
Notes to the Consolidated Financial Statements 11
Independent Auditor’s Report 64
Mandatory Disclosures
Corporate Governance 68
Climate-related Disclosures 68
Directors 68
Other Disclosures 73
When used in this annual report, references to the ‘Company’ are references
to Fletcher Building Limited. References to ‘Fletcher Building’ or the ‘Group’
are to Fletcher Building Limited, together with its subsidiaries and its interests
in associates and joint ventures. References to $ and NZ$ are to New Zealand
dollars unless otherwise stated.
Welcome to the interactive PDF. For the best experience, use Adobe
Acrobat Reader. Click on the sections above to go to the desired
pages. To go back to the contents, click on the
CONTENTS
menu
button on the top right of each page. The financial statements, notes
and references are also clickable for your convenience.
Contents
This Annual Report for the financial year ended 30 June 2026
is dated 18 August 2026 and is signed on behalf of the Board by:
Peter Crowley
Chair
Andrew Reding
Managing Director
02
Fletcher Building Limited Annual Report 2026
Chair and CEO Letter
Peter Crowley
Chair
Andrew Reding
Managing Director & CEO
Dear Shareholders,
As we did for FY25, this annual report is focused on presenting our
FY26 financial statements and required disclosures. Shareholders
seeking more detailed commentary on the Group’s FY26 performance
are encouraged to read the market announcement and investor
presentation that accompany our FY26 results – these are available
at https://fletcherbuilding.com/investor-centre.
At our Investor Day in June last year, we set out how we would change
this business. A year on, the portfolio is simpler, net debt is inside our
target range, and the Group has returned to profit. We have sharpened
our focus on the core building products and materials businesses
where we hold a sustainable competitive advantage. We are also
steadily addressing the issues that have weighed on performance
in recent years.
For the year, the Group reported revenue
(1)
of $6.0 billion (+7.3%), EBIT
(1)
before Significant Items of $414 million (+26%) and net earnings
(2)
of
$228 million, a swing of $647 million from last year's loss. This result
marked the Group’s first positive earnings from continuing operations
since FY23 and was a creditable outcome in what was a challenging
macro environment in our New Zealand and Australian markets.
Whilst we were pleased to see good improvements in a number of our
key metrics, we are conscious that Return on Invested Capital (ROIC)
for the Group is still below acceptable levels. We are determined to
continue to focus on improving returns from our businesses and being
disciplined capital allocators in order to get ROIC sustainably to the
levels it needs to be.
Execution of our strategy
Some of the highlights in FY26 included:
• Completing the divestment of Fletcher Construction to VINCI;
• Divesting Fletcher Reinforcing and Wire from our Heavy Building
Materials division, expected to complete in 1Q FY27;
• Selling a number of surplus properties, including the former
Winstone Wallboards manufacturing site in Auckland, the Laminex
HPL manufacturing site in Melbourne and an Iplex Australia site
in Adelaide;
• Repurposing the former Clever Core site in Wiri for PlaceMakers’
new Frame & Truss plant, which became fully operational in the year;
(1) From continuing operations.
(2) Includes discontinued operations.
• Fletcher Insulation successfully delivering the new Sonata Acoustics
plant, establishing a platform for future growth in the higher-value
acoustic solutions market; and
• Advancing the strategic review and options assessment for the
Residential & Development division.
Building a lower risk capital structure
Net debt at 30 June 2026 was $637 million, in the middle of our target
range and down from $999 million a year ago. The improvement
was delivered from stronger operating cash flows, divestments and
property sale proceeds.
We also simplified how we fund the business. We have repaid our US
Private Placement notes, put new bank facilities in place and extended
our syndicated debt terms, pushing our next material maturity out to
FY28. With the capital structure now on a more stable footing, we asked
Moody's to withdraw our credit rating, effective 25 June 2026, with the
rating sitting at Baa3 stable at the time. We will continue to manage the
balance sheet to investment-grade standards.
Disciplined capital allocation
We adopted Return on Invested Capital (ROIC) as the Group's
central value metric, sharpening the link between decision-making
and long-term value creation. The capital allocation approach is clear
and disciplined: prioritising investment in core building products
and materials businesses and requiring returns to justify the risks
undertaken.
• Business unit leaders are measured against industry-specific
weighted average cost of capital (WACC) hurdles under the Group’s
decentralised model.
• ROIC
(1)
before Significant Items was 5.3% for FY26 (4.7% excluding
the impact of property sales), up from 4.1% in FY25.
• This capital discipline is showing up in returns: 13 out of the 19 core
business units improved their ROIC year-on-year, four of them into
double digits.
• Returns remain uneven across the portfolio: Distribution (1.4% ROIC)
and our Steel businesses are still below acceptable levels relative to
their cost of capital. Lifting these returns further remains a key focus
for FY27.
• No new land commitments were entered into, though previously
contracted land settlements of $236 million were completed during
the year.
Dividend
The Board has not declared a dividend for FY26. As previously
signalled, the Group’s dividend policy will be reset and communicated
to shareholders once the Group is generating positive free cash flow
and is in the lower half of the net debt target range.
On behalf of the Board and management, we would like to thank
our Fletcher Building people for their resilience and outstanding
commitment during another year of significant change. And to our
shareholders, thank you for your ongoing support, patience and belief
in our future.
Andrew Reding
Managing Director & CEO
Peter Crowley
Chair
03
Fletcher Building Limited Annual Report 2026
CONTENTS
Financial Statements
04
Fletcher Building Limited Annual Report 2026
CONTENTS
Continuing operationsNote
2026
NZ$M
2025*
NZ$M
Revenue35,994 5,587
Cost of goods sold(4,060)(3,800)
Gross margin1,934 1,787
Warehouse and distribution expenses5(643)(583)
Selling, general and administrative expenses5(885)(878)
Operating margin406 326
Other income/(expenses)5(7)(7)
Share of profits of associates and joint ventures2015 10
Significant Items2.2(41)(565)
Earnings/(losses) before interest and taxation (EBIT)373 (236)
Lease interest expense(61)(62)
Funding costs15(64)(93)
Earnings/(losses) before taxation248 (391)
Taxation (expense)/benefit24(41)63
Earnings/(losses) after taxation from continuing operations207 (328)
Net earnings attributable to non-controlling interests(8)(2)
Net earnings/(losses) from continuing operations attributable to shareholders199 (330)
Net earnings/(losses) from discontinued operations net of tax2.429 (89)
Net earnings/(losses) attributable to the shareholders228 (419)
* Comparatives have been represented, refer to notes 2.1 and 2.4.
Net earnings/(losses) per share (cents)4
Basic 21.2 (41.4)
Diluted 20.9 (41.4)
Net earnings/(losses) per share from continuing operations (cents)4
Basic 18.5 (32.6)
Diluted 18.3 (32.6)
Weighted average number of shares outstanding (millions of shares)4
Basic 1,075 1,013
Diluted 1,124 1,013
Dividends declared per share (cents)17
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
On behalf of the Board, 18 August 2026.
Peter Crowley
Chair
Consolidated Income Statement
For the year ended 30 June 2026
Sandra Dodds
Director, Chair of Audit and Risk Committee
05
CONTENTS
Fletcher Building Limited Annual Report 2026
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2026
Note
2026
NZ$M
2025*
NZ$M
Net earnings/(losses) attributable to shareholders228 (419)
Net earnings attributable to non-controlling interests8 2
Net earnings/(losses) after tax
236 (417)
Other comprehensive income/(loss)
Items that do not subsequently get reclassified
to Consolidated Income Statement:
Movement in pension reserve(6)(7)
(6)(7)
Items that may be reclassified subsequently
to Consolidated Income Statement in the future:
Movement in cash flow hedge reserve(2)(7)
Movement in currency translation reserve127 (14)
Reclassification of foreign currency translation reserve
to Consolidated Income Statement
2.453
125 32
Other comprehensive income119 25
Total comprehensive income/(loss) for the year355 (392)
Total comprehensive income/(loss) for the year arises from:
Continuing operations326 (356)
Discontinued operations29 (36)
Total comprehensive income/(loss) for the year355 (392)
* Comparatives have been represented, refer to note 2.4.
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
06
CONTENTS
Fletcher Building Limited Annual Report 2026
Consolidated Statement of Movements in Equity
For the year ended 30 June 2026
NZ$MNoteShare capitalRetained earningsShare-based payments reserveCash flow hedge reserveCurrency translation reservePension reserveTotalNon-controlling interestsTotal equity
Total equity at 30 June 2024
2,995288263(79)843,317113,328
Total comprehensive income/(loss) for the year(419)(7)39 (7)(394)2 (392)
Movement in non-controlling interests2 2 (8)(6)
Movement in share-based payment reserve6 4 (12)(2)(2)
Issue of shares18679 679 679
Total equity at 30 June 20253,680 (125)14 (4)(40)77 3,602 5 3,607
Total comprehensive income/(loss) for the year228 (2)127 (6)347 8 355
Movement in non-controlling interests5 5 (13)(8)
Movement in share-based payment reserve7 2 (6)3 3
Total equity at 30 June 20263,687 110 8 (6)87 71 3,957 3,957
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
07
CONTENTS
Fletcher Building Limited Annual Report 2026
Consolidated Balance Sheet
As at 30 June 2026
AssetsNote
2026
NZ$M
2025
NZ$M
Current assets:
Cash and cash equivalents6 145 139
Current tax assets24 20 29
Contract assets50
Derivatives16 9 8
Debtors7 831 849
Inventories8 1,269 1,325
Total current assets before held for sale 2,274 2,400
Assets classified as held for sale2.4 114
Total current assets 2,388 2,400
Non-current assets:
Property, plant and equipment11 2,282 2,223
Investment property 126
Intangible assets12 676 703
Right-of-use assets13 984 1,246
Investments in associates and joint ventures20 216 218
Inventories8 561 580
Retirement plan assets25 148 150
Derivatives16 1 43
Deferred tax assets24 225 209
Total non-current assets 5,093 5,498
Total assets 7,481 7,898
Liabilities
Current liabilities:
Creditors, accruals and other liabilities9 964 1,171
Provisions10 325 278
Lease liabilities13 198 172
Derivatives16 11 19
Contract liabilities 5 56
Borrowings14 98 60
Total current liabilities before held for sale 1,601 1,756
Liabilities directly associated with assets held for sale2.4 82
Total current liabilities 1,683 1,756
Non-current liabilities:
Creditors, accruals and other liabilities9 20 31
Provisions10 89 61
Lease liabilities13 1,037 1,325
Derivatives16 4 6
Borrowings14 691 1,112
Total non-current liabilities 1,841 2,535
Total liabilities 3,524 4,291
Equity:
Share capital18 3,687 3,680
Reserves 270 (78)
Shareholders' funds 3,957 3,602
Non-controlling interests19 5
Total equity 3,957 3,607
Total liabilities and equity 7,481 7,898
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
08
CONTENTS
Fletcher Building Limited Annual Report 2026
Consolidated Statement of Cash Flows
For the year ended 30 June 2026
Note
2026
NZ$M
2025*
NZ$M
Cash flow from operating activities
Receipts from customers6,975 7,311
Receipts from residents – residents' loans – new occupation right agreements
(ORA)
17 27
Receipts from residents – residents' loans – resales of ORA
Payments to suppliers, employees and other(6,279)(6,837)
Net income tax refunded2
Net cash from operating activities
6
715 501
Cash flow from investing activities
Sale of subsidiaries277 174
Sale of investments19
Sale of property, plant and equipment20 56
Acquisition of subsidiaries(1)
Investments in joint ventures and associates(3)(4)
Dividends received11 16
Interest income received3 6
Purchase of property, plant and equipment and intangible assets(288)(280)
Investment in mining, consenting and stripping(24)(16)
Payments for investment property and investment property under development(5)(12)
Net cash from investing activities10 (61)
Cash flow from financing activities
Funding costs paid and expensed(82)(116)
Funding costs paid and capitalised to property, plant and equipment and
intangible assets
(14)(13)
Lease interest paid(68)(72)
Principal elements of lease payments(196)(189)
Contributions from non-controlling interests13 42
Distribution to non-controlling interests(21)(5)
Issue of shares18679
Net (repurchase)/issue of capital notes14(55)(80)
Net (repayment)/drawdown of borrowings14(310)(858)
Net cash from financing activities(733)(612)
Net movement in cash held(8)(172)
Add: opening cash and cash equivalents6139 311
Effect of exchange rate changes on net cash21
Closing cash and cash equivalents
6
152 139
Less: Cash and cash equivalents classified as held for sale2.4(7)
Closing cash and cash equivalents per Consolidated Balance Sheet
6
145 139
* Comparatives have been represented, refer to note 2.1.
The accompanying notes form part of and are to be read in conjunction with these consolidated financial statements.
09
CONTENTS
Fletcher Building Limited Annual Report 2026
NoteDescriptionPage
Financial Performance
1
Statement of accounting policies
11
2
Key estimates, judgements, segments and management performance metrics
12
3
Revenue from contracts with customers
30
4
Net earnings per share
31
5
Consolidated Income Statement disclosures
32
Working Capital Management
6
Cash and cash equivalents
33
7
Debtors
34
8
Inventories, including land and property developments
34
9
Creditors, accruals and other liabilities
35
10
Provisions
36
Long-term Investments
11
Property, plant and equipment
39
12
Intangible assets
41
13
Leases
43
Funding and Financial Risk Management
14
Borrowings
45
15
Net funding costs
48
16
Financial risk management
49
Group Structure and Related Parties
17
Dividends and shareholder tax credits
53
18
Capital
53
19
Non-controlling interests
54
20
Investments in associates, joint ventures and joint operations
54
21
Related party disclosures
55
Other Information
22
Capital expenditure commitments
56
23
Contingent liabilities
56
24
Taxation
57
25
Retirement plans
59
26
Share-based payments
61
27
Subsequent events
63
10
CONTENTS
Fletcher Building Limited Annual Report 2026
Notes to the Consolidated Financial Statements 2026
Contents
Notes to the Consolidated Financial Statements 2026
1. STATEMENT OF ACCOUNTING POLICIES
General information
The consolidated financial statements presented are those of Fletcher Building Limited (the Company) and its subsidiaries (the Group).
The Group is primarily involved in the manufacturing and distribution of building materials and residential development. Fletcher
Building Limited is domiciled in New Zealand. The registered office of the Company is 810 Great South Road, Penrose, Auckland.
The Company is registered under the Companies Act 1993 and is a Financial Markets Conduct Act (FMCA) 2013 reporting entity in
terms of the Financial Reporting Act 2013. The Group is a for-profit entity. The Company is listed on the New Zealand Stock Exchange
(NZX), and the Australian Securities Exchange (ASX) as a Foreign Exempt Listing.
Basis of presentation
These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice in
New Zealand and the requirements of the Financial Markets Conduct Act 2013. Generally Accepted Accounting Practice are the
New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). They also comply with International Financial
Reporting Standards.
These financial statements are presented in New Zealand dollars ($), which is the Group’s presentation currency, and rounded to the
nearest million unless otherwise stated.
The consolidated financial statements comprise the income statement, statement of comprehensive income, statement of
movements in equity, balance sheet, statement of cash flows, and statement of accounting policies, as well as the notes to these
financial statements.
Accounting convention
Accounting policies have been consistently applied by the Group and unless otherwise stated, are in line with prior year. These
financial statements are based on the general principles of historical cost accounting, except for assets and liabilities measured
at their fair value, as described below:
−Certain financial assets and liabilities (including derivative instruments) – measured at fair value;
−Defined benefit pension plan asset/liabilities – measured at fair value; and
−Investment property – measured at fair value or revalued amounts.
Where necessary, certain comparative information has been reclassified to conform to changes in presentation in the current year.
Accounting policies are disclosed within each of the relevant notes to the consolidated financial statements and are denoted by the
adjacent coloured line.
Critical accounting estimates and judgements
The preparation of consolidated financial statements in conformity with NZ IFRS requires the Directors to make estimates and
judgements that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of sales and expenses during the reporting period. Key
estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances. Actual results could differ from
those estimates.
The estimates and judgements that are critical to the determination of the amounts reported in the consolidated financial
statements have been disclosed with the relevant notes in the financial statements and are indicated by the adjacent coloured line,
or where applied to the consolidated financial statements as a whole, are detailed in the corresponding notes in the consolidated
financial statements.
Basis of consolidation
The consolidated financial statements comprise the Company, its controlled entities and its interest in associates, partnerships and
joint arrangements. Intercompany transactions and balances are eliminated in preparing the consolidated financial statements.
Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity.
Subsidiaries are included in the consolidated financial statements using the acquisition method of consolidation, from the date control
commences until the date control ceases. The acquisition method of accounting is used to account for all business combinations,
regardless of whether equity instruments or other assets are acquired.
11
CONTENTS
Fletcher Building Limited Annual Report 2026
Foreign currency translation
(i) Translation of the financial statements of foreign operations
The assets and liabilities of the Group’s overseas operations are translated into New Zealand currency at the rates of exchange
prevailing at balance date. The revenue and expenditure of these entities are translated using an average exchange rate reflecting
an approximation of the appropriate transaction rates. Exchange variations arising on the translation of these entities and other
currency instruments designated as hedges of such investments are recognised directly in the currency translation reserve and
in the Consolidated Statement of Comprehensive Income. The cumulative exchange variations are reclassified subsequently to
the Consolidated Income Statement if the overseas operation to which the reserve relates are sold or otherwise disposed of.
(ii) Foreign currency transactions
Transactions in foreign currencies are translated at exchange rates at the date of the transactions. Monetary assets and liabilities
in foreign currencies at balance date are translated at the rates of exchange prevailing at balance date.
Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in earnings, except
where deferred in the Consolidated Statement of Comprehensive Income as qualifying cash flow hedges and qualifying net
investment hedges.
Non-monetary assets in foreign currencies are translated at the exchange rates in effect when the amounts of these assets
were recognised.
The following key exchange rates were applied in the preparation of the consolidated financial statements:
NZD/AUD20262025Change
Average rates0.86510.9138(5.3)%
Closing rates0.82050.9260(11.4)%
2. KEY ESTIMATES, JUDGEMENTS, SEGMENTS AND MANAGEMENT PERFORMANCE METRICS
This section provides details of the key estimates and judgements undertaken when preparing these consolidated financial statements.
2.1 CHANGES IN ACCOUNTING POLICIES, INTERPRETATION AND AGENDA DECISIONS
Reclassification of break fees and make-whole costs on termination of US private placement (USPP) notes and related cross currency
interest rate swaps (CCIRS)
During the year, the Group reviewed the presentation and classification of break fees and make-whole costs relating to the prepayment
of USPP notes and associated CCIRS incurred in the current and comparative periods. These costs were previously classified and
presented as Significant Items; however, the Group determined that they are more appropriately presented within funding costs.
As a result, $10 million of costs presented as Significant Items in the comparative year ended 30 June 2025 have been reclassified to
funding costs. The reclassification also affected the Consolidated Statement of Cash Flows, with amounts reclassified between funding
costs paid and net repayment of borrowings within cash flows from financing activities. This adjustment had no effect on total profit,
earnings per share, equity or net cash flows.
This change reflects a presentation refinement only and does not represent a change in accounting policy or correction of an error
under NZ IAS 8.
Reclassification of net interest on defined benefit pension plans
During FY26, the Group changed its accounting policy for the presentation of the net interest component relating to defined benefit
pension obligations under NZ IAS 19. Previously, $7 million was presented in other income/(expenses) as employee-related costs within
EBIT for the financial year ended 30 June 2025. The Group now presents this amount within funding costs, below EBIT.
The Group considers that the revised presentation provides more relevant and reliable information by better reflecting the financing
nature of the net interest component and improving transparency of the Group’s underlying operating performance. The revised
presentation is also consistent with the classification principles expected to apply under NZ IFRS 18 Presentation and Disclosure
in Financial Statements in future periods.
The change has been applied retrospectively in accordance with NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors, and comparative information has been reclassified accordingly. The change has no impact on total profit, earnings per share,
equity or net cash flows.
New and amended accounting standards and interpretation adopted
The new and amended standards and interpretations that have been issued but are not yet effective, up to the date of issuance of the
Group’s financial statements, are disclosed below. The Group intends to adopt these new and amended standards and interpretations,
where applicable, when they become effective, or earlier where the Group elects to early adopt them.
12
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
New and amended accounting standards and interpretation not yet effective
NZ IFRS 18 - Presentation and Disclosure in Financial Statements
In May 2024, the XRB issued NZ IFRS 18 Presentation and Disclosure in Financial Statements, as a replacement for NZ IAS 1
Presentation of Financial Statements. NZ IFRS 18 is effective for the Group’s financial year beginning 1 July 2027 and will apply
retrospectively. Earlier application is permitted.
NZ IFRS 18 introduces new presentation and disclosure requirements designed to improve comparability and transparency in financial
statements. The standard introduces a defined structure for the statement of profit or loss, including specified totals and subtotals,
and requires income and expenses to be classified into one of five categories: operating, investing, financing, income taxes and
discontinued operations. The standard also introduces new disclosure requirements for management-defined performance measures,
additional guidance on aggregation and disaggregation, and further requirements for presenting and explaining subtotals of income
and expenses.
NZ IFRS 18 also results in consequential amendments to other standards, including narrow-scope amendments to NZ IAS 7 Statement
of Cash Flows. These amendments include changing the starting point for the indirect method of presenting cash flows from
operating activities from “profit or loss” to “operating profit or loss”, and removing existing classification options for certain cash flows,
including interest and dividends.
The Group expects to early adopt NZ IFRS 18 for the period ended 30 June 2027. The Group does not expect adoption to have
an impact on recognition or measurement in the consolidated financial statements. However, adoption is expected to affect the
presentation of the Consolidated Income Statement, the classification of certain income and expense items, and the related note
disclosures.
The key expected presentation and disclosure impacts include classification of all income and expenses in the Consolidated Income
Statement into the categories required by NZ IFRS 18, presentation of newly required subtotals including operating profit or loss,
disclosure of expenses by nature where expenses are presented by function in the operating category of the Consolidated Income
Statement, and disclosure of reconciliations between amounts previously presented under NZ IAS 1 and the restated amounts
presented on adoption of NZ IFRS 18.
13
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2.2 SEGMENT AND NON-GAAP FINANCIAL INFORMATION AND MANAGEMENT PERFORMANCE METRICS
Segmental information
Segmental information is presented in respect of the Group’s industry and geographical segments. The use of industry segments
as the primary format is based on the Group’s management and internal reporting structure, which recognises groups of assets and
operations with similar risks and returns.
Change in Divisional Structure
Effective 1 July 2025, the Group implemented a new divisional structure following a strategic review to simplify operations,
decentralise decision-making and improve performance accountability. As part of this change:
−the Building Products division was reclassified as the Light Building Products division, with Steel businesses moved into the newly
established Heavy Building Materials division;
−the Australia division was disestablished, with its businesses reallocated into the Light Building Products division, with the
exception of Stramit®, which was moved into the Heavy Building Materials division; and
−all Concrete division businesses were moved and consolidated into the Heavy Building Materials division.
Comparative information disclosed throughout this note has been updated to reflect the new divisional structure and the presentation
of discontinued operations, as described below.
Description of industry segments
Light Building
Products
The Light Building Products division is a manufacturer, distributor and marketer of building products used in the
residential, industrial and commercial markets in New Zealand and Australia. Businesses include plasterboard,
laminates and panels, insulation and piping.
Heavy Building
Materials
The Heavy Building Materials division includes the Group’s interests in the concrete and aggregates value chain,
including extraction of aggregates, cement production, ready-mix concrete and concrete products, which
operates primarily in New Zealand. The division also includes the Group’s Steel businesses in both Australia
and New Zealand.
Distribution
The Distribution division consists of building and plumbing product distribution businesses in New Zealand.
Residential and
Development
The Residential and Development division primarily operates in New Zealand, but also in Australia. In New Zealand,
the division’s operations include building and sale of residential homes and apartments, development and sale of
commercial and residential land. In Australia, the division’s operations include development and sale of commercial
land. Development activity includes sale of land property which are surplus to the Group’s operating requirements.
Discontinued
operations
Discontinued operations comprise the Tradelink® business, which was classified as held for sale from 1 April 2024
and disposed of on 30 September 2024; the Construction division, which has been presented as a discontinued
operation from 31 December 2025, reflecting the divestment of the majority of the division and wind-down of the
remaining retained liabilities; and other non-strategic portfolio businesses identified for exit as part of the Group’s
announced strategic reset, comprising Fletcher Reinforcing and Wire, CSP Pacific® and Vivid Living®. Further
details of the change in presentation are set out in note 2.4.
Non-GAAP financial information policy
For internal reporting to the Board, the Audit and Risk Committee and external reporting to its stakeholders, the Group uses certain
non-GAAP financial measures (alternative performance measures) alongside its NZ IFRS results to provide additional insight into
the Group’s underlying performance and financial position. These measures – which include earnings before interest, taxation,
depreciation, depletion and amortisation expense (EBITDA) before Significant Items, earnings before interest and taxation (EBIT) before
Significant Items, net earnings per share before Significant Items, Trading Cash before Significant Items, Free Cash before Significant
Items, Invested Capital, Funds, and Net Debt – are not defined or specified under NZ IFRS. The Group believes that these non-GAAP
measures, which are not considered to be a substitute for or superior to NZ IFRS measures, provide stakeholders with additional
useful information on the performance of the business, with a clearer understanding of the Group’s underlying operating results and
financial position. Management uses these non-GAAP financial information measures consistently from period to period for internal
planning and reporting. The Group adheres to applicable regulatory guidance on non-GAAP disclosures, emphasising transparency,
consistency, and comparability in how these metrics are calculated and presented. Importantly, each non-GAAP measure is reconciled
to the closest IFRS measure in the accounts so that stakeholders can clearly tie these figures back to audited IFRS results.
14
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Description of Non-GAAP Financial Information
EBIT and
EBITDA before
Significant Items
Net earnings before
Significant Items
The Group makes certain Significant Item adjustments to the statutory profit measures in order to derive non-
GAAP measures. The Group discloses certain non-operating items as Significant Items. The Group’s policy is
to recognise Significant Items for transactions or events outside of the Group’s ongoing operations that have
a significant impact on reported profit. This policy provides stakeholders with additional useful information as
a means to assess the year-on-year trading performance of the Group. On this basis, Significant Items include,
but are not limited to, the following:
−Gains and losses arising from mergers and acquisition (M&A) activity (i.e. business acquisitions and
disposals) and associated costs.
−Costs arising from significant Group or divisional restructuring activities, major site closures or significant
changes in strategy that are not considered by the Group to be part of the normal operating costs of
the business.
−Impacts of significant one-off/unusual events that have a material effect on the Group’s financial
performance and asset valuation.
−Impairment charges and provisions that are considered to be significant in nature and/or value to the
trading performance of the business.
In addition to the above, EBITDA before Significant Items excludes the depreciation and amortisation of fixed,
intangible and right-of-use (RoU) assets, while net earnings before Significant Items adjust for the net-of-
tax consequences of Significant Items recognised in the period to reflect an “underlying” net earnings for
continuing operations.
Trading and Free
cash before
Significant Items
Trading cash (or trading cash flow) is a non-GAAP measure highlighting cash generated or used by the
Group’s operations. Derived from NZ IFRS net operating cash flows, it adjusts for non-trading related items.
Excluding financing, tax, Significant Items, legacy cash flows, but including lease payments. Trading cash
focuses on recurring cash flows from trading activities, aiding in assessing liquidity and operational efficiency.
“Trading cash” is adjusted for net capital expenditure invested during the period to reflect the “Free cash”
generated or consumed which impacts external borrowings, funding costs and potential dividends to
shareholders. “Free cash” at a Group level also includes cash tax payments. Reconciliations to the NZ IFRS
cash flow statement are provided below.
Net Debt
Net Debt is the total of all interest-bearing borrowings (loans, USPP, capital notes, other debt), adjusted
for debt hedging activities, less cash and cash equivalents. This metric is used in determining the Group’s
leverage and gearing ratio. It is used by management to assess financial risk and capital structure metrics.
Though Net Debt is a non-GAAP measure, it is derived from NZ IFRS line items (borrowings, derivatives used
in hedging of borrowings, cash) on the balance sheet. A full reconciliation of Net Debt is included in note 14.
Funds and
Invested Capital
“Funds” (or funds employed) represents the external assets and liabilities of the Group and is used for internal
reporting purposes. At a Group level, funds excludes net debt and deferred tax balances (with the exception
of deferred tax on brands) and intercompany eliminations, while at a divisional or segment level, funds
excludes net debt, intergroup advances/borrowings, current and deferred tax balances (with the exception of
deferred tax on brands). This non-GAAP measure reflects the capital used in operations and assets generating
earnings. Funds indicates the capital intensity of the business and is used in return on capital measures. While
NZ IFRS does not define “funds” as a single figure, its components are derived from the audited balance
sheet including investment in working capital, fixed assets, indefinite life intangible assets and net RoU asset/
liability positions.
“Invested Capital” is based on the same components as “Funds”, with the exception that it excludes RoU
lease liability positions.
15
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Industry segments: Income statement
2026
NZ$M
Gross
revenue
External
revenue*
Gross
marginOverheads
(1)
Operating
margin
Other
income/
(expenses)†
(2)
Equity-
accounted
earnings
Revaluation
gains/(losses)
(3)
EBIT before
Significant
Items
Significant
Items†EBIT
Depreciation,
depletion and
amortisation
expenseEBITDA
EBITDA
before
Significant
Items
Light Building Products 2,305 2,118 868 (631) 237 (3) 12 246 (36) 210 127 337 373
Heavy Building Materials 2,033 1,719 521 (416) 105 3 108 108 119 227 227
Distribution 1,577 1,557 393 (382) 11 1 12 12 61 73 73
Materials and distribution 5,915 5,394 1,782 (1,429) 353 (2) 15 366 (36) 330 307 637 673
Residential and Development 599 599 152 (54) 98 (4) 94 1 95 1 96 95
Corporate 8 1 8 (53) (45) (1) (46) (6) (52) 8 (44) (38)
Continuing operations eliminations (528) (8) 8
Continuing operations 5,994 5,994 1,934 (1,528) 406 (7) 15 414 (41) 373 316 689 730
Discontinued operations 1,109 1,074 133 (106) 27 2 (12) 17 1 18 24 42 41
Discontinued operations
eliminations
(61) (26)
Group 7,042 7,042 2,067 (1,634) 433 (5) 15 (12) 431 (40) 391 340 731 771
2025
NZ$M
Gross
revenue
External
revenue*
Gross
marginOverheads
(1)
Operating
margin
Other
income/
(expenses)†
(2)
Equity-
accounted
earnings
Revaluation
gains/(losses)
(3)
EBIT before
Significant
Items
Significant
Items†EBIT
Depreciation,
depletion and
amortisation
expenseEBITDA
EBITDA
before
Significant
Items
Light Building Products 2,089 1,895 784 (589) 195 (1) 7 201 (324) (123) 119 (4) 320
Heavy Building Materials 1,950 1,646 495 (389) 106 (9) 3 100 (83) 17 110 127 210
Distribution 1,528 1,504 381 (361) 20 (1) 19 (32) (13) 60 47 79
Materials and distribution 5,567 5,045 1,660 (1,339) 321 (11) 10 320 (439) (119) 289 170 609
Residential and Development 557 541 122 (67) 55 1 56 (10) 46 4 50 60
Corporate 10 1 10 (64) (54) 3 (51) (116) (167) 15 (152) (36)
Continuing operations eliminations (547) (5) 9 4 4 4 4 4
Continuing operations 5,587 5,587 1,787 (1,461) 326 (7) 10 329 (565) (236) 308 72 637
Discontinued operations 1,813 1,704 220 (173) 47 1 6 54 (127) (73) 52 (21) 106
Discontinued operations
eliminations
(183) (74)
Group 7,217 7,217 2,007 (1,634) 373 (6) 10 6 383 (692) (309) 360 51 743
* Comparatives have been reclassified to reflect intra-group sales between continuing
operations and Construction Division (discontinued operation), resulting in a gross-up
of external revenue and cost of goods sold in continuing operations and corresponding
eliminations within discontinued operations, with no impacts on total Group results.
† Comparatives have been represented, refer to note 2.1.
(1) Overheads reflect warehouse, distribution, selling, general and administrative expenses.
(2) Other income/(expenses) include restructuring and redundancy costs; costs associated
with Golden Bay Cement®’s MVAC ship breakdown in FY25; gains/losses from the
disposal of assets; and proceeds from the disposal of NZ ETS units.
(3) Revaluation gains include gains recognised from the remeasurement of Vivid Living®’s
investment properties at each reporting date.
16
Fletcher Building Limited Annual Report 2026
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Significant Items
During the financial year, the Group recognised a number of Significant Items arising from one-off restructuring activities, legacy
legal matters, asset recoverability assessments and the decision to divest the Construction division and exit remaining construction
activities. These items are non-recurring in nature and do not reflect the Group’s continuing underlying operating performance.
Significant Items from continuing operations include:
Light Building Products
Winstone Wallboards® property rationalisation and prior year NZCDS disposal adjustments ($2 million)
During the period, the Group updated its estimate of the remaining costs associated with the previously announced exit from two
Auckland distribution centres, resulting in a further $3 million provision. This was partially offset by the reversal of a $1 million provision
recognised against a receivable arising from the disposal of New Zealand Ceiling and Drywall (NZCDS). Both amounts have been
classified as Significant Items due to their association with previously announced disposal and rationalisation activities.
Laminex® New Zealand Taupō start up and transition costs ($6 million)
The Group commenced the transition to its new Taupō manufacturing plant in FY26, incurring $6 million of start-up and reorganisation
costs associated with establishing operations and commissioning production at the new facility. These costs have been classified
as Significant Items as they relate to a new major operational investment and are not reflective of the ongoing performance of the
business once the site is fully operational.
Iplex® Australia Western Australia pipes legal costs ($10 million)
Iplex® Pipelines Australia (Iplex® Australia) incurred an additional $10 million in legal costs in managing claims and disputes related
to the Typlex Pro-Fit matter. These costs have been classified as Significant Items, consistent with the treatment of costs in the
prior period.
Laminex® Australia site closures and reorganisation ($11 million)
During the period, the Group completed and announced a programme of site closures and organisational changes across Laminex®
Australia as part of an ongoing review of its operating footprint and cost optimisation. The Group recognised costs comprising
$9 million of expected redundancy expenses and $2 million of inventory write-downs.
Laminex® Australia silicosis-related claims ($7 million)
During the period, the Group updated its estimate of the provision for silicosis-related claims, resulting in an additional charge of
$6 million. Laminex® Australia also incurred a further $1 million of associated legal and other claim-related costs. Further details are
provided in note 10.
Residential and Development
Release of previously recognised restructuring costs and provisions ($1 million)
During the year, the Residential and Development division recognised a partial recovery of previously provisioned restructuring costs,
primarily as a result of subleasing properties vacated following the Auckland branch consolidation. These amounts were classified as
Significant Items, consistent with the treatment of the original restructuring costs.
Corporate
SAP licence and corporate divestment related costs ($6 million)
The Group recognised a further $2 million of costs relating to surplus SAP licence commitments associated with the previously
announced decision not to proceed with the Digital@Fletcher ERP programme. An additional $1 million of professional advisory
and other costs was incurred in connection with divestment activities. The Group also recognised $3 million of corporate asset
impairments identified as part of the Construction divestment. These amounts have been classified as Significant Items as they relate
to previously announced strategic and divestment activities outside the Group’s ongoing operations.
Significant Items from discontinued operations include:
Gain on divestment of the Construction division ($120 million)
During the year, the Group completed the sale of its Construction division for an adjusted purchase price of $316 million. After
accounting for the net assets and associated liabilities disposed of, transaction costs, retained liabilities, and completion and
separation activities, the Group recognised a net gain on disposal of $120 million, which has been classified as a Significant Item.
Refer to note 2.4.
Retained legacy construction provisions and related costs ($73 million)
The Group recognised an additional $60 million of provisions relating primarily to legacy vertical projects retained by Fletcher Building
following the divestment of the remainder of the Construction division. The provisions cover projected costs associated with known
and announced issues, together with potential claims that may arise as construction defects are resolved and the projects are closed
out. Refer to note 10. A further $13 million of legal and related overhead costs was incurred in managing and responding to claims and
disputes associated with these projects, which have been disclosed as Significant Items, consistent with the treatment in prior years.
17
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Significant Items from discontinued operations include (continued):
NX2 divestment ($3 million)
The Group completed the sale of its 13.4% interest in the NX2 Pūhoi to Warkworth Public Private Partnership during the period,
resulting in a $3 million loss on divestment, which has been classified as a Significant Item.
Papua New Guinea closure ($6 million)
The Group recognised $6 million of net loss in relation to wind-down activities (including sale of all property, plant and equipment)
and additional costs to complete a final project as it exits from its Papua New Guinea construction operations.
Higgins® Fiji JV divestment ($9 million)
Following the sale of the Group’s 50% interest in the Construction Fiji operations, the Group recognised a loss of $9 million, which
has been classified as a Significant Item.
Write-downs and provisions relating to the planned sale of Fletcher Reinforcing and Wire (REO) and CSP Pacific® ($22 million)
The Group classified these businesses as held for sale and recognised a $22 million loss based on the expected disposal proceeds
relative to the carrying value of the assets and liabilities to be transferred. The loss has been classified as a Significant Item arising
from the agreed sale of these businesses.
Write-downs and provisions relating to the planned sale of Vivid Living® ($7 million)
The Group classified the Vivid Living® operations as held for sale and recognised a $7 million loss based on the expected disposal
proceeds relative to the carrying value of the assets to be transferred. The loss has been classified as a Significant Item arising from
the planned sale of the business.
18
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Industry segments: Cash flow
2026
NZ$M
Cash flow
from operating
activities
Adjust to
exclude: tax
payments/
(refunds)
Adjust to
include: lease
payments
Trading
cash
Exclude:
Significant Items
and legacy
cash flows
Trading cash
excluding
Significant Items
Capital
expenditure
Proceeds from
divestments
Investments in
Subs, associates
and JVs
Dividends
received
Interest
received
Adjust to
include: tax
receipts
Free cash
excluding
Significant
Items
Light Building Products 314 (75) 239 45 284 (210) 10 7 91
Heavy Building Materials 220 (80) 140 140 (76) (3) 3 64
Distribution 55 1 (66) (10) 4 (6) (19) 1 (24)
Materials and distribution 589 1 (221) 369 49 418 (305) 10 (3) 10 1 131
Residential and Development 88 (1) 87 3 90 90
Corporate (26) (7) (9) (42) 4 (38) (3) 296 2 2 259
Continuing operations 651 (6) (231) 414 56 470 (308) 306 (3) 10 3 2 480
Discontinued operations 64 4 (33) 35 2 37 (9) 10 1 39
Group 715 (2) (264) 449 58 507 (317) 316 (3) 11 3 2 519
2025
NZ$M
Cash flow
from operating
activities
Adjust to
exclude: tax
payments/
(refunds)
Adjust to
include: lease
payments
Trading
cash
Exclude:
Significant Items
and legacy
cash flows
Trading cash
excluding
Significant Items
Capital
expenditure
Proceeds from
divestments
Investments in
Subs, associates
and JVs
Dividends
received
Interest
received
Adjust to
include: tax
payments
Free cash
excluding
Significant
Items
Light Building Products 263
(2)
(68) 193 32 225 (158) 3 (1) 9 78
Heavy Building Materials 201 (72) 129 129 (91) 52 3 93
Distribution 72 1 (63) 10 10 (23) (13)
Materials and distribution 536 (1) (203) 332 32 364 (272) 55 (1) 12 158
Residential and Development 27 (3) 24 (1) 23 23
Corporate (54) (9) (63) 2 (61) (6) 159 6 98
Continuing operations 509 (1) (215) 293 33 326 (278) 214 (1) 12 6 279
Discontinued operations (8) 1 (46) (53) 121 68 (30) 16 (4) 4 54
Group 501 (261) 240 154 394 (308) 230 (5) 16 6 333
19
Fletcher Building Limited Annual Report 2026
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Industry segments: Balance sheet
2026
NZ$M
Net
working
capital
Property, plant
and equipment
and investment
property
Indefinite life
intangible
assets
Other
intangible
assets
Investments
& retirement
plan assets
Right-of-use
lease asset*
Deferred
tax liability
– brands
Derivatives
for foreign
currency
hedging
Current tax
balances
Invested
Capital
Right-of-
use lease
liability*
Deferred tax
balances
(excl. deferred
tax on brands)Net debt
Funds /
Group Equity
Light Building Products 191 1,370 478 2 192 337 (50) 2,520 (413)
2,107
Heavy Building Materials 252 821 118 9 24 298 (14) 1,508 (398)
1,110
Distribution 180 78 57 8 323 646 (367)
279
Materials and distribution 623 2,269 653 19 216 958 (64) 4,674 (1,178)
3,496
Residential and
Development
824 4 1 829 (1)
828
Corporate and other (95) 9 4 148 25 (5) 20 106 (53) 289 (644) (302)
Continuing operations 1,352 2,282 653 23 364 984 (64) (5) 20 5,609 (1,232) 289 (644) 4,022
Discontinued operations (144) 78 1 2 (1) (64) (8) 7 (65)
Group 1,208 2,360 653 24 364 986 (64) (5) 19 5,545 (1,240) 289 (637) 3,957
2025
NZ$M
Net
working
capital
Property, plant
and equipment
and investment
property
Indefinite life
intangible
assets
Other
intangible
assets
Investments
& retirement
plan assets
Right-of-use
lease asset*
Deferred
tax liability
– brands
Derivatives
for foreign
currency
hedging
Current tax
balances
Invested
Capital
Right-of-
use lease
liability*
Deferred tax
balances
(excl. deferred
tax on brands)Net debt
Funds /
Group Equity
Light Building Products 169 1,193 440 4 175 369 (44) 2,306 (432)
1,874
Heavy Building Materials 249 800 112 6 20 372 (14) 1,545 (466)
1,079
Distribution 167 68 57 8 328 628 (373)
255
Materials and distribution 585 2,061 609 18 195 1,069 (58) 4,479 (1,271)
3,208
Residential and
Development
767 2 10 779 (11)
768
Corporate and other (95) 15 9 150 43 (8) 29 143 (76) 272 (999) (660)
Continuing operations 1,257 2,078 609 27 345 1,122 (58) (8) 29 5,401 (1,358) 272 (999) 3,316
Discontinued operations (50) 271 47 20 23 124 (5) 430 (139) 291
Group 1,207 2,349 656 47 368 1,246 (63) (8) 29 5,831 (1,497) 272 (999) 3,607
* Following the Group’s strategic reset, management reassessed lease extension options under NZ IFRS 16 on a lease-by-lease basis and
removed extension periods no longer considered reasonably certain to be exercised. This resulted in lower right-of-use assets and lease
liabilities in the current reporting period compared with the comparative periods.
20
Fletcher Building Limited Annual Report 2026
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Geographic segments
20262025
NZ$M
External
revenue
EBIT before
Significant ItemsFunds*
Non-current
assets†
External
revenue
EBIT before
Significant Items ‡Funds*
Non-current
assets†
New Zealand 4,945 279 3,339 3,506 5,175 285 3,502 3,955
Australia 2,046 148 947 1,212 1,997 97 836 1,143
Other* 51 4 (329) 1 45 1 (731) 2
Group 7,042 431 3,957 4,719 7,217 383 3,607 5,100
* Funds “other” includes net debt and taxation.
† Non-current assets exclude deferred tax assets, retirement plan surplus and financial instruments.
‡ Comparatives have been represented, refer to note 2.1.
Net earnings per share before Significant Items
Earnings per share is disclosed in full in note 4. The below disclosure has been included to provide additional useful information by removing the impact of Significant Items in the current year and
prior year, and the resulting impact on the earnings per share measure. The effect of Significant Items on earnings from continuing operations per share is as follows:
NZ$M20262025‡
Net earnings/(losses) after taxation from continuing operations (as per Consolidated Income Statement)199 (330)
Add back: Significant Items before taxation (note 2.2)
41 565
Less: tax benefit on Significant Items (note 24)
(13)(103)
Net earnings from continuing operations before Significant Items227 132
Net earnings per share from continuing operations before Significant Items (cents)
21.1
13.0
Net earnings/(losses) per share (cents) from continuing operations - as reported per Consolidated Income Statement18.5 (32.6)
‡ Comparatives have been represented, refer to note 2.1.
21
Fletcher Building Limited Annual Report 2026
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
2.3 INTANGIBLE ASSET IMPAIRMENT TESTING
Goodwill and intangible assets with indefinite useful lives
The Group tests indefinite life intangible assets, including goodwill and brands, for impairment on an annual basis. Each cash
generating unit (CGU) to which goodwill is allocated is valued using a discounted cash flow model. This is representative of the
higher of fair value less costs to dispose and value-in-use.
Management has used its past experience of revenue growth, operating costs and margin, and external sources of information
where appropriate, to determine cash flow projections for the future. These cash flow projections are principally based on the
business units’ forecast five-year plan, which are risk adjusted where appropriate, except where management considers a longer
explicit forecast period appropriate having regard to the nature and circumstances of the relevant CGU. Cash flows beyond five
years have been extrapolated using estimated terminal growth rates, which do not exceed the long-term average growth rate for
the industries and countries in which the business units operate. Cash flows are discounted using a nominal rate specific to each
business and jurisdiction.
The Group performs its annual impairment assessment and considers indicators of impairment at each reporting date. This
assessment includes consideration of the relationship between the Group’s market capitalisation and its book value, together
with the current and forecast performance of individual businesses and developments in the markets in which they operate.
During the year, trading conditions across a number of the Group’s core end-markets remained subdued. Residential construction
activity in New Zealand and Australia continued to be affected by affordability constraints, lower consent volumes and delayed
development activity. Non-residential and infrastructure markets remained active in selected segments, although longer decision
cycles, competitive pressure and project timing continued to affect near-term demand, margins and earnings visibility. While
external forecasts indicate a gradual improvement in residential activity over the medium term, the timing and extent of the recovery
remain uncertain, with geopolitical developments continuing to create risks for market confidence, supply chains and input costs.
The Group’s forecasts assume a gradual recovery in its core markets over the medium term, supported by business-specific
initiatives relating to pricing, operational efficiency, service levels, market share and growth opportunities. While the external
economic outlook has improved modestly, the timing and extent of the recovery remain uncertain.
Recoverable amounts were principally determined using value-in-use calculations based on Board-approved budgets and longer-
term forecasts, together with updated trading performance, market outlook assumptions and valuation inputs. For Laminex® New
Zealand, which has undertaken significant capital investment in its new Taupō manufacturing facility resulting in a material increase
in the carrying amount of the CGU, a ten-year explicit forecast period was used. Management considers the longer forecast period
appropriate given the scale and long-term nature of the investment and the time required to achieve expected utilisation levels
and associated manufacturing and product-mix benefits. Discount rates and terminal growth assumptions are updated to reflect
prevailing market conditions and the risks associated with the forecast cash flows.
The assessment included a detailed review of businesses that were impaired or identified as having an increased impairment risk
in the prior year. In particular, Iplex® New Zealand, Humes®, Stramit®, Waipapa Pine and PlaceMakers® were assessed using updated
forecasts and business plans. These plans include initiatives intended to improve profitability, operational performance and market
share as market conditions recover.
Based on the Group’s impairment assessment, the recoverable amounts of the Group’s CGUs exceeded their respective carrying
amounts and no impairment losses were recognised for the year ended 30 June 2026. The valuations of certain CGUs remain
sensitive to reasonably possible changes in key assumptions, including the timing and extent of market recovery, achievement of
forecast margins and market share, delivery of operational and growth initiatives, and changes in discount rates. Further information
on the assumptions and sensitivities relating to these CGUs is provided below.
General New Zealand CGU assumptions
The goodwill and brand balances for fourteen New Zealand CGUs represent 43% of the Group (2025: 49%). Discount rates between
10.0% and 11.4% (2025: between 10.5% and 12.1%) have been used for New Zealand business units, reflecting the risk profile and the
regions in which they operate. An average annual growth rate of 0.15% (2025: (0.32)%) has been used over the five-year forecast period
for New Zealand business units, except for Laminex® New Zealand, based on past performance and management’s expectations of
market development. The terminal growth rate employed for New Zealand businesses was 2.3% (2025: 2.0%).
General Australian CGU assumptions
The goodwill and brand balances for two Australia CGUs represent 57% of the Group (2025: 51%). Discount rates of 10.2% and 11.1%
(2025: 9.8%) have been used for Australian business units, reflecting the risk profile and the regions in which they operate. An average
annual growth rate of 0.79% (2025: 1.88%) has been used over the five-year forecast period for Australian business units, based on past
performance and management’s expectations of market development. The terminal growth rate employed for Australia businesses was
2.5% (2025: 2.5%).
22
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Watchlist CGUs and sensitivity disclosures
The following table sets out the goodwill and brands balance for those CGUs, where a reasonably possible change in key assumptions
could result in impairment:
2026
Iplex®
New Zealand
NZ$M
Waipapa Pine
New Zealand
NZ$M
Humes®
New Zealand
NZ$M
Stramit®
Australia
NZ$M
PlaceMakers®
New Zealand
NZ$M
Goodwill3752191556
Brands746
Iplex® New Zealand
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))4.80%
EBIT margin (5-year average)10.90%
Discount rate10.30%
Iplex® New Zealand continued to operate in challenging market conditions during the year, although its performance improved
compared with the prior period. The business achieved year-on-year volume growth and recovered market share in selected segments,
supported by improved commercial execution and customer engagement. However, subdued construction activity, excess industry
capacity and increased competitive intensity continued to place pressure on selling prices, earnings and margin recovery. Elevated
warehouse and distribution costs also constrained performance.
Management has continued to implement the business’s turnaround plan, with initiatives focused on improving operational efficiency,
optimising production and distribution, strengthening service levels and pursuing targeted growth opportunities across selected
product categories and commercial markets. The updated impairment assessment assumes that these initiatives, together with
a gradual recovery in market activity, will support further improvements in profitability over the medium term. The principal risk
to the valuation relates to external market conditions, particularly the imbalance between industry capacity and demand, increased
commoditisation and the resulting pressure on pricing and margins.
The recoverable amount of the Iplex® New Zealand CGU was assessed using a value-in-use discounted cash flow method. The
valuation was based on a five-year business plan reviewed by the Board and formulated with consideration of the business’s historical
performance, current trading conditions and expected market recovery. A terminal growth rate of 2.3% (2025: 2.0%) and a post-
tax discount rate of 10.3% (2025: 10.75%) were applied. The recoverable amount exceeded the carrying amount of the CGU and,
accordingly, no impairment was recognised. The assessment reflects improved operating performance compared with the prior year,
while remaining dependent on forecast margin improvement and a gradual rebalancing of industry capacity and demand sufficient
to support pricing and profitability.
Iplex® New Zealand remains on the Group’s impairment watchlist as at 30 June 2026 due to the continued sensitivity of its valuation
to changes in operating and valuation assumptions.
Impact of possible changes in key assumptions (Iplex® New Zealand)
The recoverable amount of the Iplex® New Zealand CGU would equal its carrying amount if the five-year average EBIT margin
decreased by 170 basis points to 9.2%, the post-tax discount rate increased by 150 basis points to 11.8%, or the five-year revenue
compound annual growth rate decreased by 80 basis points to 4.00%. Each sensitivity has been assessed independently.
23
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Waipapa Pine
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))16.20%
EBIT margin (5-year average)16.50%
Discount rate11.40%
Waipapa Pine continued to perform below the expectations established at the time of its acquisition, with earnings affected by timber
price pressure and subdued residential construction activity. These impacts were partly mitigated by higher production volumes,
market share gains, recent market price increases and continued improvements in operational performance.
Management’s strategy includes progressing the planned transition to a double-shift operating model, which is expected to increase
production capacity and improve operating leverage. The updated impairment assessment assumes that the double-shift investment
proceeds, consistent with the strategic rationale for the acquisition and the Group’s commitments under the Overseas Investment
Office approval. The valuation also assumes a gradual recovery in market demand and timber pricing over the medium term.
The recoverable value of the Waipapa Pine CGU was assessed using a value-in-use discounted cash flow method. The valuation
was based on a five-year business plan reviewed by the Board and formulated with consideration of the business’s performance
since acquisition, current trading conditions and external market forecasts. A terminal growth rate of 2.3% (2025: 2.0%) and a post-tax
discount rate of 11.4% (2025: 10.80%) were applied. The recoverable value exceeded the carrying value of the CGU and, accordingly,
no impairment was recognised. The assessment remains dependent on delivery of the planned double-shift investment, recovery
in timber pricing and achievement of the forecast production, sales and margin improvements.
Waipapa Pine remains on the Group’s impairment watchlist as at 30 June 2026 due to the continued sensitivity of its valuation
to changes in operating assumptions and the execution of its growth and capital programme.
Impact of possible changes in key assumptions (Waipapa Pine)
The recoverable amount of the Waipapa Pine CGU would equal its carrying amount if the five-year average EBIT margin decreased by
130 basis points to 15.2%, the post-tax discount rate increased by 70 basis points to 12.1%, or the five-year revenue compound annual
growth rate decreased by 70 basis points to 15.5%. Each sensitivity has been assessed independently.
Humes®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))7.30%
EBIT margin (5-year average)6.50%
Discount rate10.00%
Humes® continued to operate in challenging market conditions during the year, with earnings affected by subdued construction
activity, delays in major projects and subdivision development, and lower demand across higher-margin concrete and precast
segments. The business remained in a recovery and rebuild phase, with pricing and operational improvements partly offsetting
the impact of weaker volumes and continued competitive pressure.
Management has continued to progress its turnaround strategy, supported by initiatives focused on branch expansion, pricing
transformation, manufacturing and network optimisation, and targeted growth in precast, rural and stormwater markets. The updated
impairment assessment assumes these initiatives, together with a gradual recovery in market activity, are expected to support
improvements in market share, margins and profitability over the medium term. Execution risk remains, particularly in relation
to the timing of the market recovery and delivery of the forecast operational and commercial improvements.
The recoverable value of the Humes® CGU was assessed using a value-in-use discounted cash flow method. The valuation was based
on a five-year business plan reviewed by the Board and formulated with consideration of the business’s historical performance, current
trading conditions and external market forecasts. A terminal growth rate of 2.3% (2025: 2.0%) and a post-tax discount rate of 10.0%
(2025: 10.60%) were applied. The recoverable value exceeded the carrying value of the CGU and, accordingly, no impairment was
recognised. The assessment remains dependent on recovery in market activity, achievement of forecast market share and margins,
and successful execution of the business’s strategic initiatives.
Humes® remains on the Group’s impairment watchlist as at 30 June 2026 due to the continued sensitivity of its valuation to changes
in operating and valuation assumptions.
Impact of possible changes in key assumptions (Humes®)
The recoverable amount of the Humes® CGU would equal its carrying amount if the five-year average EBIT margin decreased by 220
basis points to 4.3%, the post-tax discount rate increased by 380 basis points to 13.8%, or the five-year revenue compound annual
growth rate decreased by 120 basis points to 6.1%. Each sensitivity has been assessed independently.
24
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Stramit®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))7.80%
EBIT margin (5-year average)3.40%
Discount rate11.10%
Whilst Stramit® earnings remained below longer-term expectations in FY26, the business made significant progress in stabilising
operations, improving customer service and delivering above budget results in the year. Management continues to focus on restoring
performance in the core roll-forming business while progressing targeted growth opportunities.
The business’s transformation programme includes initiatives focused on service improvement, productivity and operational
performance, together with growth in market share. The updated impairment assessment assumes a gradual recovery in market share
and profitability in the medium term, through recovery across core roll-forming business and continued growth in higher margin doors
and shed segments. While progress has been made, execution risk remains, particularly in relation to sustaining market share gains
and delivering the forecast benefits from these initiatives.
The recoverable amount of the Stramit® CGU was assessed using a value-in-use discounted cash flow method. The valuation was
based on a five-year business plan reviewed by the Board and formulated with consideration of the business’s historical performance,
current trading conditions and expected market recovery. A terminal growth rate of 2.5% (2025: 2.5%) and a post-tax discount rate of
11.1% (2025: 9.8%) were applied. The recoverable amount exceeded the carrying amount of the CGU and, accordingly, no impairment
was recognised. The assessment remains dependent on recovery in the core business, achievement of forecast market share and
margins, and successful execution of the business’s operational and growth initiatives.
Stramit® remains on the Group’s impairment watchlist as at 30 June 2026 due to the continued sensitivity of its valuation to changes
in operating assumptions and delivery of growth initiatives.
Impact of possible changes in key assumptions (Stramit®)
The recoverable amount of the Stramit® CGU would equal its carrying amount if the five-year average EBIT margin decreased by
80 basis points to 2.6%, the post-tax discount rate increased by 410 basis points to 15.2%, or the five-year revenue compound annual
growth rate decreased by 30 basis points to 7.50%. Each sensitivity has been assessed independently.
Placemakers®
Key AssumptionsValue attributed
Revenue growth (5-year Cumulative Average Growth Rate (CAGR))3.90%
EBIT margin (5-year average)2.30%
Discount rate10.70%
PlaceMakers® was added to the Group’s impairment watchlist during FY26 due to market trading conditions and lower valuation
headroom. Trading conditions remained mixed, with lower residential construction activity earlier in the year, regional variability and
competitive pressure affecting volumes and margins, particularly in the Auckland market.
Management has continued to progress key initiatives focused on improving efficiency, range and product availability. The updated
impairment assessment assumes that these initiatives, together with a conservative and gradual recovery in residential construction
activity, will support improvements in revenue, margins and profitability over the medium term. Risk remains, particularly in relation
to the pace of market recovery, and consequential timing of benefits from initiatives.
The recoverable value of the PlaceMakers® CGU was assessed using a value-in-use discounted cash flow method. The valuation was
based on a five-year business plan reviewed by the Board and formulated with consideration of the business’s historical performance,
current trading conditions and external market forecasts. A terminal growth rate of 2.3% (2025: 2.0%) and a post-tax discount rate
of 10.7% (2025: 10.5%) were applied. The recoverable value exceeded the carrying value of the CGU and, accordingly, no impairment
was recognised. The assessment remains dependent on recovery in residential construction activity, achievement of forecast margin
improvements and successful execution of the business’s pricing, product and customer initiatives.
Impact of possible changes in key assumptions (Placemakers®)
The recoverable amount of the PlaceMakers® CGU would equal its carrying amount if the five-year average EBIT margin decreased by
40 basis points to 1.9%, the post-tax discount rate increased by 150 basis points to 12.2%, or the five-year revenue compound annual
growth rate decreased by 10 basis points to 3.80%. Each sensitivity has been assessed independently.
25
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2.4 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified as held for sale
are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly
attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable within 12 months from the
classification date, and the asset or disposal group is available for immediate sale in its present condition.
Property, plant and equipment, intangible assets and right-of-use assets are not depreciated or amortised once classified as held
for sale. Assets and liabilities classified as held for sale are presented separately as current items in the Consolidated Balance Sheet.
Discontinued operations are reported when a component of the Group has been disposed of or is classified as held for sale,
and represents a separate major line of business or geographical area of operations. The results of discontinued operations
are presented separately in the Consolidated Income Statement as a single amount comprising the post-tax profit or loss of
discontinued operations and the post-tax gain or loss recognised on the disposal or remeasurement to fair value less costs to
sell. Comparative information in the Consolidated Income Statement is represented to reflect the classification of operations as
discontinued from the start of the earliest period presented. This separate presentation enables users to distinguish the financial
performance of operations that have been exited, or are being exited, from the Group’s continuing operations and provides a clearer
basis for assessing the ongoing performance of the Group.
Construction divestment
On 29 May 2026, the Group completed the sale of its Construction division to VINCI Construction, the construction arm of the VINCI
Group. The transaction comprised the sale of Fletcher Construction Holdings and its three New Zealand business units: Higgins®,
Brian Perry Civil® and Fletcher Construction Major Projects. The sale consideration was approximately $334 million, and remains
subject to customary working capital and net debt adjustments.
The results of the Construction division have been presented as a discontinued operation in the consolidated financial statements,
with comparatives represented. The results of the discontinued operation include the trading results of the businesses disposed of
up to the completion date, together with the gain or loss recognised on disposal.
Following completion, the assets and liabilities of the disposed Construction businesses have been derecognised from the
Group’s Consolidated Balance Sheet. Fletcher Construction’s South Pacific operations in Vanuatu and Kiribati were excluded from
the transaction and are expected to be divested separately. Residual responsibilities associated with completed legacy vertical
construction projects, including the New Zealand International Convention Centre, were also excluded from the transaction and
are retained by the Group, together with certain historic civil construction projects that are beyond their defect liability periods.
Fletcher Reinforcing and Wire (REO) and CSP Pacific® divestment
During the year, the Group entered into an agreement with United Industries Limited to sell Fletcher Reinforcing and Wire for
$15.7 million, and separately progressed the disposal of CSP Pacific®. These disposals form part of the Group’s broader restructuring
and portfolio rationalisation programme.
Subsequent to year-end, the remaining completion conditions relating to the divestment of Fletcher Reinforcing and Wire, including
the required approval from the New Zealand Commerce Commission and certain third-party consents, were satisfied. Completion
of the transaction is expected by the end of August 2026. The purchase price remains subject to customary adjustments for working
capital and net debt.
The assets and liabilities of Fletcher Reinforcing and Wire met the criteria for classification as held for sale on 28 April 2026, when
the sale became highly probable and was announced to the market. Fletcher Reinforcing and Wire has also been presented within
discontinued operations.
Judgement was required in determining whether the business qualified for presentation as a discontinued operation under
NZ IFRS 5. In making this assessment, the Group considered the business’s separately identifiable operations and cash flows, asset
base, historical and forecast losses, the impairment recognised on classification as held for sale, and the strategic significance of the
disposal as part of the Group’s announced portfolio reset. The Group also considered whether separate presentation would provide
users with more useful information about the financial performance of the Group’s continuing operations.
On balance, these factors supported the conclusion that Fletcher Reinforcing and Wire should be presented as a discontinued
operation.
Vivid Living®
The Group is actively progressing the divestment of its Vivid Living® retirement village operations at Karaka and Red Beach. At 30 June
2026, the associated disposal group, comprising investment property, other operating assets and liabilities arising under occupational
right agreements, was classified as held for sale.
Investment property within the disposal group continues to be measured at fair value in accordance with NZ IAS 40. In determining
fair value at 30 June 2026, the Group considered the indicative values identified through the preliminary sales process, together with
other available market evidence. This resulted in a fair value decrease of approximately $12 million, which was recognised in profit
or loss.
26
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Financial performance and cash flow information for discontinued operations
Construction
The financial performance and cash flow information presented for the Construction division reflects the full years ended 30 June
2026 and 30 June 2025. For the year ended 30 June 2026, the results include the South Pacific operations and retained operations
being wound down for the full year, while the results of the material component sold to VINCI are included only up to the date
of disposal on 29 May 2026.
Steel businesses and Vivid Living®
The financial performance and cash flow information for Fletcher Reinforcing and Wire and CSP Pacific® (together as Steel businesses)
and Vivid Living® presented are for the year ended 30 June 2026 and the year ended 30 June 2025.
Tradelink®
The financial performance and cash flow information for Tradelink® presented are for the year ended 30 June 2025 including
the results from 1 July 2024 and up to the date of disposal of 30 September 2024.
2026
Construction
NZ$M
Vivid Living®
NZ$M
Steel
businesses
NZ$M
Total
NZ$M
Revenue966 2 80 1,048
Cost of goods sold(842)(2)(71)(915)
Gross margin124 9 133
Selling, general and administrative expenses(86)(3)(17)(106)
Operating margin38 (3)(8)27
Other income/(expenses)2 2
Revaluation gains/(losses)(12)(12)
Significant Items30 (7)(22)1
Earnings/(losses) before interest and taxation (EBIT)70 (22)(30)18
Lease interest expense(7) (1)(8)
Funding costs(5)(4) (9)
Income tax benefit17 2 9 28
Net earnings/(losses) from discontinued operations net of tax75 (24)(22)29
Other comprehensive income - reclassification of foreign currency
translation reserve on disposal
Total comprehensive income/(loss) from
discontinued operations
75 (24)(22)29
Net earnings/(losses) per share from discontinued operations
(cents)
Basic 7.0 (2.2) (2.1) 2.7
Diluted 6.7 (2.1) (2.0) 2.6
Net cash inflow/(outflow) from operating activities55 12 (3)64
Net cash inflow/(outflow) from investing activities7 (5) 2
Net cash inflow/(outflow) from financing activities*(33)(4)(5)(42)
Net increase/(decrease) in cash generated by the discontinued
operations
29 3 (8)24
* Excludes the benefit of intercompany funding.
27
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2025
Construction
NZ$M
Vivid Living®
NZ$M
Steel businesses
NZ$M
Tradelink®
NZ$M
Total
NZ$M
Revenue1,358 1 69 202 1,630
Cost of goods sold(1,206)(1)(58)(145)(1,410)
Gross margin152 11 57 220
Selling, general and administrative expenses(102)(3)(17)(51)(173)
Operating margin50 (3)(6)6 47
Other income/(expenses)1 1
Revaluation gain/(losses)6 6
Significant Items(58) (11)(58)(127)
Earnings/(losses) before interest and taxation
(EBIT)
(7)3 (17)(52)(73)
Lease interest expense(7) (1)(2)(10)
Funding costs(7)(5) (12)
Income tax (expense)/benefit(4)3 5 2 6
Net earnings/(losses) from discontinued
operations net of tax
(25)1 (13)(52)(89)
Other comprehensive income - reclassification
of foreign currency translation reserve
53 53
Total comprehensive income/(loss) from
discontinued operations
(25)1 (13)1 (36)
Net (losses)/earnings per share from
discontinued operations (cents)
Basic(2.5)0.1 (1.3)(5.1)(8.8)
Diluted(2.5)0.1 (1.3)(5.1)(8.8)
Net cash inflow/(outflow) from operating
activities
(21)19 1 (7)(8)
Net cash inflow/(outflow) from investing
activities
(1)(11) (2)(14)
Net cash inflow/(outflow) from financing
activities*
(37)(5)(4)(12)(58)
Net increase/(decrease) in cash generated by
the discontinued operations
(59)3 (3)(21)(80)
* Excludes the benefit of intercompany funding.
28
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
The carrying amounts of assets and liabilities as at the date of sale
Construction
29 May 2026
NZ$M
Tradelink®
30 September 2024
NZ$M
Assets classified as held for sale
Cash and cash equivalents224
Property, plant and equipment13029
Intangible assets4712
Contract assets68
Tax assets15
Right-of-use assets74105
Debtors39110
Inventories17160
Total assets of disposal group held for sale397435
Liabilities directly associated with assets classified as held for sale
Creditors, accruals and other liabilities105126
Lease liabilities78132
Provisions2819
Contract liabilities10
Tax liabilities5
Total liabilities of disposal group held for sale226277
Net assets171 158
Details of disposals of Tradelink® and Construction division
Construction
29 May 2026
NZ$M
Tradelink®
30 September 2024
NZ$M
Consideration received or receivable334 186
Purchase price adjustment paid or payable(18)(2)
Separation and transaction costs(25)(31)
Total disposal consideration291 153
Carrying amount of net assets sold (171)(158)
Gain/(loss) on disposal before reclassification of foreign currency translation reserve 120 (5)
Reclassification of foreign currency translation reserve (53)
Gain/(loss) on disposal120 (58)
Construction - VINCI sale
The sale price is approximately $334 million, subject to customary adjustments for working capital and net debt. The transaction
completed on 29 May 2026 and the assets and liabilities disposed of were derecognised from that date.
The final gain or loss on disposal remains subject to finalisation of completion adjustments, including working capital and net debt.
Any adjustment to the final consideration, or to the carrying value of the net assets disposed, will be recognised in the period in which
the final amount is determined.
The gain of $120 million on disposal has been presented as a Significant Item from discontinued operations. See note 2.2.
Tradelink®
In the prior year, the Group disposed of Tradelink® for consideration comprising a $175 million completion payment and an $11 million
milestone payment linked to the delivery of transitional services. A loss of $58 million was recognised as a Significant Item within
discontinued operations.
The final loss remains subject to resolution of the ongoing dispute with MML Holdings regarding the completion statements.
Any resulting adjustment will be recognised in the period in which it is determined.
29
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Assets and liabilities held for sale
The following assets and liabilities were classified as held for sale in relation to South Pacific, Steel businesses and Vivid Living® as at
30 June 2026:
2026
South Pacific
NZ$M
Steel
businesses
NZ$M
Vivid Living®
NZ$M
Total
NZ$M
Cash and cash equivalents7 7
Investment property75 75
Property, plant and equipment1 2 3
Intangible assets1 1
Right-of-use assets2 2
Debtors6 7 13
Inventories13 13
Total assets14 25 75 114
Creditors, accruals and other liabilities2 4 60 66
Lease liabilities5 5
Tax liabilities 1 1
Contracts8 8
Provisions1 1 2
Total liabilities12 10 60
82
Net assets
2 15 15 32
Financial Review
This section explains the results and performance of the Group, including earnings per share.
3. REVENUE FROM CONTRACTS WITH CUSTOMERS
The Group revenue is derived from the following streams:
−Sale and delivery of building products and materials
−Development and sale of properties
Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer
at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
The Group has generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods
or services before transferring them to the customer.
Sale and delivery of building products and materials
The materials and distribution businesses within the Group recognise revenue when control of the goods has passed to the
customer, the associated costs and possible return of goods can be estimated reliably, there is no continuing management
involvement with the goods, and there is a high probability that a significant reversal in the revenue recognised will not occur.
Revenue is measured net of returns, trade discounts and volume rebates. The timing of the transfer of control varies depending
on the individual terms of the sales agreement. For most sales, this occurs when the product is delivered to the customer.
Development and sale of properties
Through the Residential and Development division the Group derives income from the sale of completed houses and apartments,
and the sale of development sites surplus to Group requirements. Revenue is recognised when control passes to the customer
for each type of transaction. Residential unit sales are commonly recognised at the time of settlement, when title passes to the
customer and payment is received. Land development sales are recognised in line with the requirements of the specific sale
and purchase agreement.
Performance obligations vary between the types of transactions. The sale of a completed house to a customer is a single
performance obligation, as residential units are not constructed under contract for a customer. For development sales, the
division reviews the terms of the sale to determine whether the performance obligations are distinct and separately identifiable.
30
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
20262025
NZ$MPoint in timeOver time
Total
revenuePoint in timeOver time
Total
revenue
Sale and delivery of building
products and materials
5,394 5,394 5,047 5,047
Development and sale of properties 599 599 539 539
Lease contract revenue 1 1 1 1
Total from continuing operations 5,993 1 5,994 5,586 1 5,587
4. NET EARNINGS PER SHARE
Earnings per share is the portion of a company’s profit allocated to each outstanding ordinary share and is calculated by dividing the
earnings attributable to shareholders by the weighted average of ordinary shares on issue during the year including treasury stock.
Capital notes and options are convertible into the Company’s shares and may therefore result in dilutive securities for purposes of
determining the diluted net earnings per share. The Group may, at its option, purchase or redeem the capital notes for cash at the
principal amount plus any accrued but unpaid interest.
20262025
Net earnings/(losses) per share (cents)
Basic 21.2 (41.4)
Diluted 20.9 (41.4)
Net earnings/(losses) per share from continuing operations (cents)
Basic 18.5 (32.6)
Diluted 18.3 (32.6)
NZ$MNZ$M
Numerator
Net earnings/(losses)228 (419)
Numerator for basic earnings/(losses) per share228 (419)
Dilutive capital notes7
Numerator for diluted net earnings/(losses) per share235 (419)
Numerator (continuing operations)
Net earnings/(losses)199 (330)
Numerator for basic earnings/(losses) per share199 (330)
Dilutive capital notes7
Numerator for diluted net earnings/(losses) per share from continuing operations206 (330)
Denominator (millions of shares)
Weighted average number of shares outstanding1,075 1,013
Conversion of dilutive capital notes49
Denominator for diluted net earnings/(losses) per share1,124 1,013
31
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
5. CONSOLIDATED INCOME STATEMENT DISCLOSURES
The following items are specific disclosures, either required or provided for transparency, and are included within cost of goods sold,
warehouse and distribution expenses, selling, general and administrative expenses, and other income/expenses from continuing
operations (excluding Significant Items) in the Consolidated Income Statement:
2026
NZ$M
2025
NZ$M
Employee related short-term costs
(1)
1,130 1,082
Other long-term employee related benefits 55 52
Depreciation of property, plant & equipment 141 134
Amortisation of intangible assets 8 11
Depreciation of right-of-use assets 167 162
Short-term and low-value lease asset expense 43 52
Repairs and maintenance 133 136
Bad debts written off 3 3
Net periodic pension service cost 2 2
Research and development expenditure 2 2
Donations and sponsorships 3 3
Other (income)/expenses
Restructuring costs 5 5
Golden Bay Cement®’s MVAC ship breakdown 6
Other sundry income (3) (6)
(Gains)/losses on disposal/impairment of asset 5 2
(1) Short-term employee benefits for the executive committee included in the above are disclosed in note 21.
Auditor’s remuneration
2026
NZ$000’s
2025
NZ$000’s
Audit and review of the financial statements
(1)
3,117 3,974
Other assurance services and other agreed-upon procedures engagements
(2)
206 10
Taxation services
(3)
8
Other services
(4)
42 158
Total non-audit services 248 176
Total auditor's remuneration 3,365 4,150
(1) The audit includes fees for both the annual audit of the financial statements (including subsidiary level statutory financial statements) and the review of the interim
financial statements.
(2) Other assurance services relate to agreed-upon procedures ($11,000) and limited/reasonable assurance over the Group’s greenhouse gas emissions disclosures in New Zealand
and Australia ($195,000).
(3) Taxation services in the comparative period relate to taxation compliance ($8,000) relating to the Group’s Fiji-based subsidiaries.
(4) Other services relate to remuneration benchmarking ($35,000) and delivery of sustainability-related training ($7,000).
32
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Working Capital Management
This section provides details of the key elements of working capital which include cash, receivables, inventories and
short-term liabilities.
6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash and demand deposits with banks that are readily convertible to cash.
2026
NZ$M
2025
NZ$M
Cash and bank balances102 74
Contract retention bank balances12 18
Cash held in joint operations - Group's share23 24
Cash balances subject to certain restrictions8 23
Cash and cash equivalents per Consolidated Balance Sheet145 139
Cash and cash equivalents classified as held for sale
7
Cash and cash equivalents152 139
At 30 June 2026, approximately $7 million (2025: $23 million) of total cash and deposits were held in subsidiaries that operate in
countries where exchange controls and other legal restrictions apply and are not immediately available for general use by the Group.
Reconciliation of net earnings/losses to net cash from operating activities
2026
NZ$M
2025
NZ$M
Net earnings/(losses)228 (419)
Net earnings attributable to non-controlling interests8 2
236 (417)
Add/(less) non-operating cash flow items:
Interest expense*139 188
Interest income(3)(6)
Add/(less) non-cash items:
Depreciation, depletions and amortisation expenses340 360
Other non-cash items*111 566
Taxation15 (69)
Net (gains)/losses on disposal of businesses, property, plant and equipment(114)61
488 1,100
Net working capital movements
Residential and Development(10)(8)
Construction8 (95)
Other divisions:
Debtors(127)(7)
Inventories9 18
Creditors111 (90)
(9)(182)
Net cash from operating activities715 501
* Comparatives have been represented, refer to note 2.1.
33
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
7. DEBTORS
Debtors are amounts due from customers for goods sold or services performed in the ordinary course of business. They are
generally due for settlement within 30 to 90 days and are therefore all classified as current. Debtors are recognised initially at the
amount of consideration that is unconditional, unless they contain significant financing components, when they are recognised at
fair value. The Group holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures
them subsequently at amortised cost using the effective interest method. Details about the Group’s credit risk policies and the
calculation of the loss allowance are provided in note 16.4.
2026
NZ$M
2025
NZ$M
Trade debtors726 618
Contract debtors93
Contract retentions11 29
Less: expected credit loss provisions(15)(16)
Trade and contract debtors722 724
Other receivables109 125
831 849
Current634 642
0 – 30 days over standard terms70 68
31 – 60 days over standard terms9 10
61+ days over standard terms24 20
Provision(15)(16)
Trade and contract debtors722 724
Fair value of debtors
Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
Recoverability and risk exposure
Information about the recoverability of trade receivables and the Group’s exposure to foreign currency risk and credit risk can be
found in notes 16.1 and 16.4.
8. INVENTORIES, INCLUDING LAND AND PROPERTY DEVELOPMENTS
Raw materials, stores, work in progress and finished goods
Raw materials, stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises
direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated
on the basis of normal operating capacity. Cost includes the reclassification from equity of any gains or losses on qualifying cash
flow hedges relating to purchases of raw material but excludes borrowing costs. Costs are assigned to individual items of inventory
on a first-in, first-out basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value
is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs and
replacement costs in the consumable stores and spares necessary to make the sale.
Property and land inventories
Residential units and freehold land held for resale are stated at the lower of cost and net realisable value. Freehold land under
development comprises land acquisition and development costs as well as any direct or indirectly attributable overheads.
Residential units, both completed and under development, comprise apportioned land costs as well as direct materials, labour
costs, site overheads, associated professional charges and other attributable overheads. Net realisable value represents the
estimated selling prices less all estimated costs of completion and overheads.
34
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2026
NZ$M
2025
NZ$M
Manufacturing, distribution and other inventories
Raw materials153 178
Work in progress39 18
Finished goods593 584
Consumable stores and spare parts65 59
850 839
Inventories held at cost775 780
Inventories held at net realisable value75 59
850 839
Property and land inventories
Freehold land88 75
Freehold land under development449 541
Properties under development380 315
Completed properties63 135
980 1,066
All property and land inventories are held at cost.
Total inventories
Current portion1,269 1,325
Non-current portion561 580
1,830 1,905
Inventory classified as non-current
The non-current portion of inventories relates to land and developments that are expected to be held for greater than 12 months.
Land and property commitments
The Group’s Residential and Development division has commitments for the purchase of land and construction services totalling
$166 million (2025: $236 million), of which $90 million is expected to be delivered in the year ending 30 June 2027.
Emissions units
Emissions units held for own use are allocated to the Group under the New Zealand Emissions Trading Scheme (NZ ETS) and used to
settle the Group’s emissions obligation. The units are initially recognised at cost with subsequent reassessment for lower of cost or net
realisable value. Emissions units held by the Group as at 30 June 2026 have been recognised at nil value (2025: nil).
9. CREDITORS, ACCRUALS AND OTHER LIABILITIES
Trade creditors and other liabilities are stated at cost or estimated liability where accrued. Employee entitlements include annual
leave which is recognised on an accrual basis and the liability for long service leave which is measured as the present value of
expected future payments to be made in respect of services provided by employees.
Assumptions in determining long service leave relate to the discount rate, estimates relating to the expected future long service
leave entitlements, future salary increases, attrition rates and mortality.
35
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2026
NZ$M
2025
NZ$M
Trade creditors486 469
Contract retentions10 20
Accrued interest7 14
Other liabilities310 525
Employee entitlements164 164
Workers' compensation schemes7 10
984 1,202
Current portion964 1,171
Non-current portion20 31
Carrying amount at the end of the year984 1,202
The non-current portion of creditors and accruals as at 30 June 2026 primarily relates to long service employee entitlement obligations
and deferred land purchases.
Put option liability
Included in “Other liabilities” is $98 million (2025: $102 million) reflecting put options held by partners in residential developments.
These represent the Group’s contractual obligations to purchase the partners’ interests under specified conditions. In accordance with
NZ IAS 32 Financial Instruments: Presentation, these put options are classified as financial liabilities and measured at amortised cost
using the effective interest method. As the risks and rewards of the partnership interests are expected to be retained by the partner,
any subsequent remeasurement of the liability is done through non-controlling interests in reserves.
Deferred land settlement
Included within “Other liabilities” is $23 million (2025: $142 million) of deferred payables for residential land acquisitions contracted
to by the Group.
10. PROVISIONS
Provisions for restructuring, service and environmental warranties and other provisions are recognised when the Group has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle
the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses other than losses
recognised on onerous contracts. Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an
outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate at the end of the reporting period of the expenditure
required to settle the present obligation. The discount rate used to determine the present value is a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as an interest expense.
Restructuring
Restructuring provisions are recognised when the Group is demonstrably committed, without realistic possibility of withdrawal,
to a formal detailed plan. Costs relating to ongoing activities are not provided for.
Warranty and environmental
Warranty provisions represent an estimate of potential liability for future rectification work in respect of products sold and services
provided. Environmental provisions represent an estimate for future liabilities relating to environmental obligations.
Onerous contracts
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot avoid because it has
the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The
unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling
it and any compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate
directly to the contract (i.e. both incremental costs and an allocation of costs directly related to contract activities).
Make good
Make good provisions are recognised for obligations to restore leased sites to the original condition. Costs are estimated based
on lease terms, discounted where material, and capitalised into the related asset.
Other
Other provisions relate to miscellaneous matters, across the Group.
36
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2026
Restructuring
NZ$M
Warranty &
environmental
NZ$M
Onerous
contracts
NZ$M
The Industry
Response
NZ$M
Make
good
NZ$M
Other
NZ$M
Total
NZ$M
Carrying amount at the
beginning of the year
10 12 37 154 49 77 339
Charged to earnings14 5 63 5 27 114
Settled or utilised(11)(2)(5)(22)(29)(69)
Released to earnings (1) (3)(4)
Recognised on balance sheet4 4 11 19
Currency translation1 19 3 2 25
Classified as held for sale (5)(5)(10)
14 18 95 151 56 80 414
2025
Restructuring
NZ$M
Warranty &
environmental
NZ$M
Onerous
contracts
NZ$M
The Industry
Response
NZ$M
Make
good
NZ$M
Other
NZ$M
Total
NZ$M
Carrying amount at the
beginning of the year
15 18 78 26 62 199
Charged to earnings7 1 37 170 36 251
Settled or utilised(9)(7)(78)(14)(3)(19)(130)
Released to earnings(4) (1)(5)
Recognised on balance sheet 26 (1)25
Currency translation1 (2)(1)
10 12 37 154 49 77 339
2026
NZ$M
2025
NZ$M
Current portion325 278
Non-current portion89 61
Carrying amount at the end of the year414 339
During the year, the Group utilised $11 million (2025: $9 million) in respect of restructuring obligations across various businesses.
The $14 million remaining provision, in relation to restructuring, is expected to be utilised within the next 3 years. Warranty and
environmental provisions are generally expected to be utilised over the next five years. However, certain environmental provisions
relate to resource consent obligations that extend beyond 20 years.
Retained legacy construction provisions
The Group continues to retain responsibilities associated with Fletcher Construction’s completed legacy vertical construction
projects and South Pacific operations following the divestment of the remainder of the New Zealand Construction division to VINCI
Construction on 29 May 2026. As a result, the Group continues to have exposure to defects in construction projects, arising from
obligations under contract and at law. As at 30 June 2026, the Group was subject to a number of claims of this nature. In assessing
these claims, the Group has applied significant estimates and judgements, including consideration of the merits of each claim, the
estimated cost of remediation, and the likelihood of recoveries from third parties. These estimates and judgements may change as
the claim or repair work progresses.
The Group recognised an additional provision of $60 million in its interim financial statements as at 31 December 2025, primarily
relating to legacy vertical construction projects that are being retained by Fletcher Building. The provision covers projected costs
associated with known and announced issues and also provides for potential claims that, while currently uncertain or not yet
identified, are expected to arise as part of discharging the Group’s present obligations for post completion defects as stipulated
in project contracts at law. The provision represents management’s best estimate of the costs required to close out construction
defects on those projects. The recognition of the additional provision reflects a change in the Group’s assessment of the risks and
costs associated with managing future claims following the divestment, including the absence of an ongoing construction business.
The Group has considered its overall exposure to claims received to date and, where appropriate, has provided for them.
Notwithstanding this, there remains a risk that the Group’s ultimate exposure to these claims may exceed the amount currently
provided.
37
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
New Zealand International Convention Centre (NZICC)
The New Zealand International Convention Centre (NZICC) achieved practical completion and was formally handed over to SkyCity
in November 2025. The assessment of the project position continues to involve significant estimates and judgements, with the final
outcome subject to uncertainty, primarily relating to exposures to potential defects, the close-out of final subcontractor claims,
litigation liability and any recoveries under the NZICC third-party liability insurance policy. On 6 June 2025, SkyCity commenced
proceedings against Fletcher Construction and the Company in relation to alleged delays to the NZICC project. Fletcher
Construction disputes SkyCity’s claims for additional liquidated damages above the contractual cap and continues to defend the
proceedings. The Group continues to pursue recoveries under the NZICC third-party liability insurance policy and related legal
actions; however, no recovery has been recognised as at 30 June 2026 as the proceeds are not considered virtually certain in
accordance with NZ IAS 37.
Silicosis
Laminex® Australia (together with other engineered stone manufacturers, distributors and fabricators in Australia) is the subject
of a number of silica related personal injury claims in Australia. Laminex® Australia has settled the majority of claims that have
been brought against it to date, and in FY26 Laminex® Australia contributed $2.9 million (2025: $0.4 million) to claim settlements.
Estimating the number and cost of future silica related personal injury claims is subject to uncertainties and assumptions, as
further detailed below. The Group has considered the exposure Laminex® Australia may have for the existing and future claims
and, to the extent it considers appropriate to do so, has provided for them. Based on currently available information, an additional
provision of $6 million has been recognised underpinned by more reliable information of current diagnosed potential claims. While
regulators in multiple States are currently seeking a greater contribution from the industry to settlement amounts than has been
the case historically, Laminex® Australia does not accept the basis for seeking greater contribution, however there is a risk that the
proportionate contribution by the industry to settlement amounts may increase in future claims. Notwithstanding the information
obtained from settling claims in recent years, there remains significant uncertainty in relation to the Group’s full exposure to these
claims, including:
−the number of workers affected by silicosis as a result of engineered stone provided by manufacturers and fabricators
in Australia;
−the number of claims that may be received and the timing of them;
−the nature of those claims and the amounts sought to be recovered, which vary considerably based on the condition and
circumstances of the injured worker;
−the size of any settlement amounts agreed or damages awarded, particularly given different laws in various States; and
−the degree to which other parties, such as the worker’s employer and other manufacturers, are liable to (and do) contribute
to any amount owed to the worker.
As a result, there remains a risk that, ultimately, the final exposure of Laminex® Australia to these claims will be greater than the
amount currently allowed.
The Western Australia (WA) plumbing failures Industry Response
Fletcher Building subsidiary, Iplex® Pipelines Australia (Iplex® Australia) has been addressing claims raised against Iplex® Australia
in respect of a hot and cold water polybutylene pipe product it previously manufactured under the name “Pro-fit”, primarily relating
to plumbing failures impacting some WA homes.
Iplex® Australia started manufacturing Pro-fit with Typlex resin from mid-2017 and those products represented the bulk of sales of
hot and cold water residential pipes after that time. Iplex® Australia ceased the sale of Pro-fit in mid-2022. The Pro-fit product was
sold in other Australian states (outside WA) but it was not sold in New Zealand.
On 13 November 2024, the Group announced that Iplex® Australia, together with the Western Australian Government and key
industry stakeholders, had finalised the Industry Response (the IR) to address the plumbing failures impacting some WA homes
constructed using Typlex Pro-Fit pipe. Among other matters, the IR provides builders participating in the IR with funding for an
agreed work and remediation programme for affected WA homes. The IR commits Iplex® Australia to fund 80% of the direct costs
incurred by participating builders, with the WA Government contributing 20% up to a capped amount of A$30 million (NZ$33
million). The IR is entered into on a no liability, no admissions basis. All participants in the IR have also agreed to a “no sue” provision
as part of the agreement.
As a result of its entry into of the IR, Iplex® Australia recorded a provision of A$155 million (NZ$170 million) pre-tax for the expected
costs it has agreed and is obligated to incur under the IR, which are classified as a Significant Item. The total provision amount
assumes approximately A$125 million (NZ$138 million) for repair costs (net of the A$30 million contribution receivable from
the WA Government), A$15 million (NZ$16 million) for the installation of leak detector units, and A$15 million (NZ$16 million)
for expected administrative and overhead expenses. These costs are expected to be incurred over at least five years, with higher
expenditure anticipated in the initial stages to address urgent remediation work and establish necessary infrastructure (e.g. leak
detectors).
As of 30 June 2026, A$31 million (NZ$36 million) of the total provision amount has been utilised, including A$19 million
(NZ$22 million) in the current period. Costs incurred to date under the IR remain in line with the provision and the underlying
assumptions disclosed as at 30 June 2025.
The IR was launched in November 2024 and now has 56 participating builders who are undertaking the agreed work and
remediation programme. This includes remedying plumbing failures and associated damage, replacing pipes in ceilings and rooms,
as well as full home pipe replacements (during which the homeowner has the benefit of temporary accommodation where required).
The IR also includes a roll out of leak detector units to affected homes, free of charge. As at 30 June 2026, 213 homes have been
fully remediated, and over 4,900 homes have had leak detector units installed, under the IR.
38
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Costs incurred to date under the IR by Iplex® Australia are in line with the current provision which:
−assumes ~5,300 WA homes will experience one or more plumbing failures over time;
−covers the direct costs of remediation and preventive measures, including leak detector units, pipe repairs, ceiling pipe
replacements, and, for WA homes with extensive failures, a full house re-pipe plus temporary accommodation where required;
−excludes builders’ overheads or management costs or any margin or cost of expenses incurred directly by them in connection
with repairing, rectifying, or remediating any defective workmanship; and
−excludes any legal costs, including litigation defence costs.
While most major builders have agreed to participate in the IR, the Buckeridge Group of Companies (BGC), which is responsible for
constructing ~55% of the affected WA homes, has not joined the IR. The provision includes allowances for homes built by BGC, as
BGC has the option to participate in the IR at any time. Iplex® Australia remains open to engaging with BGC as to how that could be
achieved. To the extent that BGC remains outside the IR, the repair costs and associated cash flows for Iplex® Australia are expected
to be somewhat lower. BGC homes are being fitted with leak detectors. However, with BGC still remaining outside the IR, the liability
exposure that may arise due to further disputes and claims from BGC remains (see note 23 for further details).
The total estimated cost of the remediation works under the IR remains subject to significant risk and uncertainty. As noted above,
key assumptions underlying the provisioned amount include BGC’s participation in the IR and the number of WA homes built with
Typlex Pro-Fit pipes that are expected to develop leaks over time. In relation to the latter, the number of homes that has experienced
plumbing failures that have been reported via the IR up to 30 June 2026 remains within the number of homes accommodated by the
provision and the number of homes experiencing their first plumbing failure continues to decline over time. A second assumption
is that not all homes that experience one failure will go on to experience subsequent failures. A third assumption is the cost for
remediating each plumbing failure in accordance with the agreed work programme and the timing of that expenditure. If the actual
number of affected homes, the extent of failures or the repair costs (or any revised estimate thereof) exceeds current estimates
(including, for example, if the distribution of repairs skews towards more extensive and expensive interventions), the provision may
be insufficient and need to be increased. While to date these assumptions have been adequately accommodated within the existing
provision, they remain subject to review and change over time.
The provision does not account for any risk from litigation or class action (see note 23 for further details of the existing claims and
class action). Two claims against Iplex® Australia, including a class action, are currently on foot in the Federal Court of Australia. The
claims include: costs of removing, repairing, replacing and disposing of the affected pipe; repair costs and/or possessions damaged
by the affected pipe; reduction in property value, vexation, distress and disappointment. If a current or future claim is successful,
it may have a material adverse impact on the Group. Separately, a homeowner has brought a claim against both BGC and Iplex®
Australia in the WA District Court, which was subsequently joined to the Federal Court proceedings and stayed.
While the IR is expected to mitigate some risks, it does not extinguish the rights of homeowners or others to pursue claims. A final
outcome of a class action may ultimately replace the IR terms for the homes of class members and their successors.
The Group will monitor the provision and will reassess its adequacy if and as new and material information becomes available.
Long-term Investments
This section details the long-term assets of the Group including property, plant and equipment, intangible assets and leases.
11. PROPERTY, PLANT AND EQUIPMENT
Land, buildings, plant and machinery, and fixtures and fittings are stated at historical cost less depreciation. Historical cost
includes expenditure that is directly attributable to the acquisition of the items. The cost of purchasing land, buildings, plant and
machinery, and fixtures and equipment is the value of the consideration given to acquire the assets and the value of other directly
attributable costs that have been incurred in bringing the assets to the location and the condition necessary for their intended
service, including subsequent expenditure. To the extent acquisition, development and construction of capital projects extend over
a period of 12 months, attributable borrowing costs are capitalised as part of the cost of the asset while the asset is being developed
or constructed. On completion of development, all assets included in assets under construction are reclassified appropriately into
the relevant categories of property, plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs
and maintenance are charged to the Consolidated Income Statement during the reporting period in which they are incurred.
Depreciation of property, plant and equipment is calculated on the straight-line method. Expected useful lives, which are regularly
reviewed, typically range between:
Buildings 30 – 50 years
Plant and machinery 5 – 15 years
Fixtures and equipment 2 – 10 years
39
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Resource extraction assets are held at historic cost and depleted over the shorter of the life of the site or right-to-use period.
Site development costs incurred in order to commence extraction are capitalised as resource extraction assets.
Assets are reviewed annually for impairment indicators. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Consolidated
Income Statement.
2026
Land
NZ$M
Buildings
NZ$M
Plant &
Machinery
NZ$M
Fixtures &
Equipment
NZ$M
Resource
Extraction
NZ$M
Capital
Work In
Progress
NZ$M
Total
NZ$M
Carrying value at the beginning of the year 1742841,1101161134262,223
Additions133294310
Capitalised borrowings1414
Classified as held for sale(1)(1)(128)(3)(1)(2)(136)
Disposals(1)(8)(1) (10)
Depreciation expense(12)(104)(21)(11)(148)
Impairment(1)(8)(1)(10)
Transfer of assets to inventory(14)(4)(18)
Capitalised to fixed assets1141101211(148)
Currency translation89331657
1672891,0181071125892,282
Represented by:
Cost1674312,5303621845894,263
Accumulated depreciation and impairment(142)(1,512)(255)(72)(1,981)
Carrying value at the end of the year1672891,0181071125892,282
2025
Land
NZ$M
Buildings
NZ$M
Plant &
Machinery
NZ$M
Fixtures &
Equipment
NZ$M
Resource
Extraction
NZ$M
Capital
Work In
Progress
NZ$M
Total
NZ$M
Carrying value at the beginning of the year 2512681,0841101043952,212
Additions515261272
Capitalised borrowings1313
Disposals(6)(1)(7)
Depreciation expense(10)(110)(24)(10)(154)
Impairment(8)(2)(18)(28)
Transfer to right-of-use assets(39)(39)
Transfer of assets to inventory(37)(4)(41)
Capitalised to fixed assets311483214(225)
Currency translation(1)(1)(3)(5)
1742841,1101161134262,223
Represented by:
Cost1744382,5863611754264,160
Accumulated depreciation and impairment(154)(1,476)(245)(62)(1,937)
Carrying value at the end of the year1742841,1101161134262,223
As at 30 June 2026, property, plant and equipment included $589 million of assets under construction that are not depreciated until
they are commissioned and brought into use (2025: $426 million), including $414 million relating to the Laminex® New Zealand Taupō
manufacturing plant (2025: $251 million).
40
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Physical impacts from climate-related risk
In FY25, the Group completed an external review of its physical climate-related risks in conjunction with Marsh Advisory.
The assessment covered 177 owned and operated assets across Australia and New Zealand, representing approximately 92% of
Total Insured Value, and considered a range of acute and chronic climate-related hazards under multiple climate scenarios and
time horizons.
In FY26, the Group reviewed the prior-year modelling outputs against updated asset numbers and insured values and considered the
results through its refreshed climate-related risk and opportunity assessment process. After taking into account the existing controls
and insurance arrangements, no material residual acute physical climate-related risk was identified. Accordingly, no material physical
climate-related financial impacts were identified that required changes to the carrying values or expected useful lives of the Group’s
non-current assets.
The assessment identified the following key findings:
−the Group’s Annual Average Loss (AAL), representing its average annualised financial exposure to owned and operated assets,
was assessed as not material at Group level across scenarios and time horizons modelled;
−heat stress and water stress were identified as dominant long-term physical risk drivers of modelled exposure, particularly
for Australian operations; however, the resulting AAL was not expected to have a material impact at Group level; and
−individual low-probability, high-severity events may still result in significant localised damage or disruption, as the AAL
methodology does not capture full impact of such individual extreme events.
The Group will continue to monitor key physical risk drivers and material events and periodically reassess its physical climate
risk exposures.
Key impacts arising from climate-related transition risk
A significant climate-related transition risk for the Group relates to the New Zealand Emissions Trading Scheme and its impact
on Golden Bay Cement®’s operating model. At 30 June 2026, the Group’s assessment of the underlying longer-term risk had not
materially changed from the position disclosed at 30 June 2025. Uncertainty remains regarding future carbon pricing, industrial
allocation settings and the competitiveness of domestically manufactured cement relative to imports.
Subsequent to 30 June 2026, Golden Bay Cement® and the New Zealand Government entered into an agreement that supports the
continuation of Golden Bay Cement®’s domestic manufacturing operations up to 2040 and addresses the previously identified near-
term risk of closure or transition to an import-only model. Further information is provided in note 27.
The Group’s current assessment assumes that Golden Bay Cement® will continue to operate under its existing manufacturing
model, with the Government support. However, longer-term uncertainty remains beyond 2040 and, in a downside scenario where
future policy and regulatory settings adversely affect the competitiveness of domestic manufacturing, Golden Bay Cement® may
need to reconsider its operating model. Such a scenario could give rise to non-cash impairment and asset write-downs and bring
forward make good ($43.5 million) cash costs. These amounts represent a downside scenario, are subject to significant judgement
and estimation uncertainty, and are not the Group’s current expected outcome. No impairment or related provision was recognised
at 30 June 2026.
12. INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangibles are carried
at cost less any accumulated amortisation and accumulated impairment losses.
The Group’s intangible assets with indefinite useful lives are not amortised but are tested for impairment annually, either individually
or at the cash-generating unit level. Intangible assets with a definite life are amortised on a straight-line basis.
Goodwill is stated at cost, less any impairment losses. Goodwill is allocated to cash-generating units and is not amortised but
is tested annually for impairment, and when an indication of impairment exists. Brands for which all relevant factors indicate that
there is no limit to the foreseeable net cash flows are considered to have an indefinite useful life and are held at cost and are not
amortised but are subject to an annual impairment test.
For the purposes of considering whether there has been an impairment, assets are grouped at the lowest level for which there
are identifiable cash flows that are largely independent of the cash flows of other groups of assets. When the book value of a group
of assets exceeds the recoverable amount, an impairment loss arises and is recognised in the Consolidated Income Statement
immediately.
Amortisation of definite life intangible assets is calculated on the straight-line method. Expected useful lives, which are regularly
reviewed, typically range between:
Intangible assets, including software 5 – 15 years
Cloud computing arrangements
The Group recognises costs incurred in configuring or customising cloud application software as an intangible asset only if the
activities create a resource that the Group can control and from which it expects to benefit. Such costs are amortised over the
estimated useful life of the software application on a straight-line basis. The remaining useful life is reviewed at least at the end
of each reporting period and any changes are treated as changes in accounting estimates.
Where the Group cannot determine whether it has control of the cloud application software, the arrangement is deemed to be
a service contract. In such cases, any implementation costs (i.e. cost incurred to configure or customise the cloud application
software) are expensed to the Consolidated Income Statement as incurred.
41
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Where the provider of the cloud application software provides both configuration and customisation services, judgement is required
to determine whether these services are distinct from the underlying use of the software application. Distinct configuration and
customisation costs are expensed as incurred as the software application is configured or customised (i.e. upfront). Non-distinct
configuration and customisation costs, that significantly enhance or modify the cloud-based application, are recognised as
a prepaid asset and expensed over the contract term on a straight-line basis.
To the extent the acquisition and development of capital intangible projects extend over a period of 12 months, attributable
borrowing costs are capitalised as part of the cost of the asset while the asset is being developed. On completion, all costs
included in asset under development are reclassified as “Other intangibles” and amortised when available for use.
Assessing the carrying value of goodwill and indefinite life brands requires management to estimate future cash flows to be
generated by the related cash-generating unit. The key assumptions used in the value-in-use or fair value less costs of disposal basis
include the expected rate of growth of revenues and earnings, the EBIT margin and the appropriate discount rate to apply, and are
detailed in note 2.3.
2026
Goodwill
NZ$M
Brands
NZ$M
Other
Intangibles
NZ$M
Total
NZ$M
Carrying value at the beginning of the year44521147703
Additions88
Disposals(4)(4)
Classified as held for sale(29)(19)(14)(62)
Impaired/derecognised(3)(3)
Amortisation expense(11)(11)
Currency translation232245
43921423676
Represented by:
Cost439315210964
Accumulated impairment/amortisation(101)(187)(288)
Carrying value at the end of the year43921423676
2025
Goodwill
NZ$M
Brands
NZ$M
Other
Intangibles
NZ$M
Total
NZ$M
Carrying value at the beginning of the year6442321581,034
Additions33
Impaired/derecognised(195)(19)(97)(311)
Amortisation expense(17)(17)
Currency translation(4)(2)(6)
44521147703
Represented by:
Cost4453122501,007
Accumulated impairment/amortisation(101)(203)(304)
Carrying value at the end of the year44521147703
Impairment of software assets
In June 2025, the Group stopped its Digital@Fletcher ERP transformation programme following the decision to decentralise
decision-making to individual business units. Following the migration of the SAP S/4 Hana system to the SAP RISE cloud platform,
the Group determined that it no longer controlled the previously capitalised ERP software asset under NZ IAS 38 Intangible assets
and derecognised its $95 million carrying amount.
42
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Significant intangible balances within cash-generating units (CGUs)
Goodwill
2026
NZ$M
Goodwill
2025
NZ$M
Brands
2026
NZ$M
Brands
2025
NZ$M
Laminex® Australia176 156 139123
Comfortech®43 43 1111
Iplex® New Zealand37 37 77
Stramit®15 14 4641
PlaceMakers®56 56
Waipapa Pine52 52
Higgins® 24 19
Humes®19 19
Winstone Aggregates®14 14
Other27 30 1110
439 445 214211
The goodwill allocated to significant CGUs accounts for 94% (2025: 80%) of the total carrying value of goodwill. The remaining
“other” CGUs, which comprise 7 (2025: 9) in total, are each less than 2% of total carrying value (2025: 7%). The significant brand assets
account for 95% (2025: 90%) of the total carrying value of brands. The remaining “other” brand assets are each less than 5% of total
carrying value (2025: 6%).
13. LEASES
The Group leases various offices, warehouses, retail stores, equipment and vehicles. Rental contracts are typically made for fixed
periods, but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. The lease agreements do not
impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be
used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. The lease payments are discounted using
the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for property leases in the
Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
Right-of-use assets are measured at cost and include, after consideration of the initial measurement of the lease liability, any lease
incentives, initial direct costs and any make good costs associated with the lease. Right-of-use assets are generally depreciated
over the shorter of the asset’s useful life and the lease term on a straight-line basis. If it is reasonably certain the Group will exercise
a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in the Consolidated Income Statement. Short-term leases are leases with a lease term of 12 months
or less. Low-value assets comprise IT equipment and small items of office furniture.
Extension options
The Group has some lease contracts that include extension options. The Group assesses at lease commencement date whether
it is reasonably certain it will exercise the extension options. The Group reassesses whether it is reasonably certain it will exercise
the options if there is a significant event or significant change in circumstances within its control. These options provide flexibility
in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement
in determining whether these extension and termination options are reasonably certain to be exercised.
As at 30 June 2026, three of the six largest property lease contracts (2025: five) have related extension options included in the
estimated lease term (where management is reasonably certain to exercise the options), resulting in future lease payments being
included in the measurement of the lease liability recorded in the Consolidated Balance Sheet.
43
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Right of use assets
2026
Land
NZ$M
Buildings
NZ$M
Plant &
Machinery
NZ$M
Total
NZ$M
Opening net book value at the
beginning of the year
589672211,246
Additions and renewals2295889
Classified as held for sale(4)(22)(38)(64)
Depreciation(2)(109)(69)(180)
Impairment(1)(18)(19)
Terminations/revisions of extension options(3)(107)(2)(112)
Currency translation22 224
Closing balance at the end of the year50762172984
2025
Opening net book value at the
beginning of the year
129632161,191
Additions and renewals1021186307
Depreciation(2)(113)(74)(189)
Impairment(1)(7)(8)
Terminations/revisions of extension options(83)(7)(90)
Transfer of assets from property, plant
and equipment
3939
Currency translation(4)(4)
Closing balance at the end of the year589672211,246
Lease liabilities
2026
NZ$M
2025
NZ$M
Opening balance1,4971,436
Additions and renewals85335
Classified as held for sale(83)
Repayments(184)(177)
Terminations/revisions of extension options(118)(92)
Currency translation38(5)
Closing balance1,2351,497
Current portion198 172
Non-current portion1,037 1,325
Carrying amount at the end of the year1,235 1,497
44
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Funding and Financial Risk Management
This section includes details on the Group’s funding and outlines the market, credit and liquidity risks that the Group is exposed to and
how these risks are managed, including the use of derivative financial instruments.
Capital risk management
The Group’s objectives when managing capital are to provide returns to shareholders and benefits for other stakeholders and to
maintain an optimal capital structure that safeguards the Group’s ability to continue as a going concern. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, undertake
share buybacks, issue new shares or sell assets to reduce net debt.
The Group has various debt facilities and covenants in place. A key measure used by the Group is net debt. Net debt represents the
value of the Group’s drawn borrowings adjusted for debt hedging activities and available cash funding. The Group has set a net debt
target range of $400 million to $900 million, with dividends to be suspended until the dividend policy is reset and communicated
to shareholders.
Credit rating
As at 30 June 2026, the Group does not hold an external credit rating. The Group’s previous Baa3 credit rating from Moody’s Investors
Service was withdrawn on 25 June 2026 at the Group’s request.
14. BORROWINGS
The Group borrows in the form of private placements, bank loans, capital notes and other financial instruments. Funding costs
associated with the Group’s borrowings are shown in note 15.
Borrowings are initially recognised at fair value net of attributable transaction costs, and are subsequently measured at amortised
cost using the effective interest rate method. Any borrowings that have been designated as hedged items are carried at amortised
cost plus a fair value adjustment under hedge accounting requirements. Borrowings denominated in foreign currencies are
retranslated to the functional currency at each reporting date.
Economic debt represents the face value of drawn borrowings adjusted for foreign currency movements hedged with derivative
instruments. The Group uses cross currency interest rate swaps, interest rate swaps and forward foreign exchange contracts to
manage its exposure to interest rates and borrowings sourced in currencies different from that of the borrowing entity’s reporting
currency. Details of debt hedging activities and instruments used are included in note 16.
Reconciliation of liabilities arising from financing activities
The table below details changes in the Group’s net debt arising from financing activities, including both cash and non-cash changes.
2025
NZ$M
Drawdowns /
Cash inflows
NZ$M
Repayments /
Cash outflows
NZ$M
Currency
translation
NZ$M
Other non-cash
movements
(including hedge
accounting)
NZ$M
2026
NZ$M
Private placements323 (356)23 10
Bank loans 627 610 (645)27 619
Capital notes 217 (55) 162
Other loans 5 3 8
Carrying value of borrowings
(as per Consolidated Balance Sheet)
1,172 613 (1,056)50 10 789
Less: value of derivatives used to manage
changes in hedged risks on debt
(34)78 (34)(10)
Economic debt1,138 613 (978)16 789
Less: Cash and cash equivalents (139)8 (21) (152)
Net debt999 613 (970)(5) 637
45
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2024
NZ$M
Drawdowns /
Cash inflows
NZ$M
Repayments /
Cash outflows
NZ$M
Currency
translation
NZ$M
Other non-cash
movements
(including hedge
accounting)
NZ$M
2025
NZ$M
Private placements489 (198)14 18 323
Bank loans 1,302 629 (1,302)(2)627
Capital notes 297 (80)217
Other loans 20 (15)5
Carrying value of borrowings
(as per Consolidated Balance Sheet)
2,108 629 (1,595)12 18 1,172
Less: value of derivatives used to manage
changes in hedged risks on debt
(31)18 (13)(8)(34)
Economic debt2,077 629 (1,577)(1)10 1,138
Less: Cash and cash equivalents (311)172 (139)
Net debt1,766 801 (1,577)(1)10 999
Carrying value of borrowings included within the Consolidated Balance Sheet as follows:
2026
NZ$M
2025
NZ$M
Current borrowings98 60
Non-current borrowings691 1,112
Total borrowings789 1,172
At reporting date, the Group had the following funding facilities:
Utilised facilities789 1,138
Unutilised bank loan facilities1,015 916
Total facilities1,804 2,054
Debt repayment
In November 2025, the Group fully prepaid and cancelled all remaining US private placement (USPP) notes with a total settlement
value of approximately $298 million. The prepayment comprised principal of $293.4 million, accrued interest including coupon
step-up of $4.3 million, and a make-whole payment of $0.5 million. In conjunction with the repayment, the Group terminated the
associated cross currency interest rate swaps (CCIRS) used to hedge the underlying USPP borrowings, resulting in a termination cost
of $8.2 million recognised within funding costs in the current period. The prepayment was funded through drawings under the Group’s
Australian debt facilities (syndicated revolving credit facilities (SFA) Tranches D1 and D2), totalling A$261 million.
Capital notes
At 30 June 2026 the Group had issued $162 million of listed capital notes to retail investors (2025: $217 million) with maturities
between 2027 and 2029. The capital notes do not carry voting rights and do not participate in any change in value of the issued shares
of Fletcher Building Limited.
On 28 January 2025, the Group through its subsidiary Fletcher Building Industries Limited (FBI) announced that the trustee for the
noteholders of each series of capital notes had agreed to amend the conditions of the capital notes. This allows FBI to elect to redeem
all capital notes of a series on the applicable election date for that series, as an alternative to the procedure for rollover of the capital
notes on new terms. On 27 January 2026, FBI elected to redeem all of the FBI200 Capital Notes that were due to rollover on 16 March
2026.
Listed capital notes are long-term fixed rate unsecured subordinated debt instruments that are traded on the NZDX. On election date,
holders may choose either to keep their capital notes on new terms or convert the principal amount and any interest into shares of
Fletcher Building Limited, at approximately 98% of the current market price. If the principal amount of these notes held at 30 June
2026 were to be converted to shares, 49 million (2025: 77 million) Fletcher Building Limited shares would be issued at the share price
as at 30 June 2026, of $3.39 (2025: $2.89).
Instead of issuing shares to holders who choose to convert, Fletcher Building may, at its option, purchase or redeem the capital notes
for cash at the principal amount plus any accrued interest.
As at 30 June 2026, the Group held $138 million (2025: $183 million) of its own capital notes. The capital notes disclosed are presented
net of the Group’s self-held capital notes.
46
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Bank loans
Syndicated revolving credit facilities
At 30 June 2026, the Group had a NZ$836 million (2025: NZ$836 million) and A$654.5 million (2025: A$654.5 million) syndicated
revolving credit facility on an unsecured, negative pledge and borrowing covenant basis. The participating lenders are both
New Zealand registered and offshore banks. The facility comprises the following tranches: NZ$311 million expiring on 1 July 2027,
NZ$200 million expiring on 31 May 2028, NZ$325 million expiring on 31 October 2029, and A$654.5 million expiring in two tranches
including July 2027 (A$404.5 million) and June 2029 (A$250 million). The funds under the syndicated revolving credit facility can
be borrowed in Australian and New Zealand dollars only.
Approximately NZ$0.8 billion of the Group’s syndicated revolving credit facilities mature on 1 July 2027. The Group has commenced
a refinancing process to extend and smooth its debt maturity profile. The refinancing is expected to be completed by 30 September
2026 and, on completion, total committed facilities are expected to reduce from NZ$1.8 billion to approximately NZ$1.55 billion.
Other loans
At 30 June 2026, the Group had other loans of $8 million (2025: $5 million) and all were subject to the negative pledge. Other loans
include bank overdrafts, short-term loans, working capital facilities and vendor loans.
Negative pledge
The Group borrows certain funds based on a negative pledge arrangement. The negative pledge includes a cross guarantee between
a number of wholly owned subsidiaries and ensures that external senior indebtedness ranks equally in all respects and includes the
covenant that security can be given only in very limited circumstances. At 30 June 2026, the Group had debt subject to the negative
pledge of $627 million (2025: $920 million).
Covenants
The Group’s financial covenants under its senior borrowing arrangements include senior interest cover ratio and senior leverage ratio.
Senior interest cover ratio measures the Group’s EBIT relative to senior interest expense and is used to assess the Group’s capacity to
service interest obligations. Senior leverage ratio measures the Group’s senior net debt relative to EBITDA and is used to assess the
Group’s financial leverage. The Group was in compliance with all financial covenants during the year and at balance date.
Liquidity and funding risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial commitments as they fall due. Funding risk is
the risk that the Group under normal circumstances, will not be able to refinance its maturing debts in an orderly manner. The Group
manages its liquidity and funding risk by maintaining a target level of undrawn committed credit facilities and an appropriate spread
of maturity dates in respect of the Group’s debt facilities which it reviews on an ongoing basis.
The following maturity analysis table sets out the remaining contractual undiscounted cash flows, including estimated interest
payments for non-derivative financial liabilities and derivative financial instruments. Creditors and accruals are excluded from this
analysis as they are not part of the Group’s assessment of liquidity risk because these are offset by debtors with similar payment terms.
2026
Contractual
cash flows
NZ$M
Up to 1 Year
NZ$M
1–2 Years
NZ$M
2–5 Years
NZ$M
Over 5 Years
NZ$M
Bank loans619294325
Capital notes162904032
Private placements
Other loans88
Borrowings – principal cash flows78998334357
Gross settled derivatives – to pay(449)(169)(130)(150)
Gross settled derivatives – to receive
449169130150
Debt derivatives financial instruments
– principal cash flows
Total principal cash flows78998334357
Contractual interest cash flows282062
Total lease cash flow1,828257224522825
Total contractual cash flows2,645375564881825
47
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2025
Contractual
cash flows
NZ$M
Up to 1 Year
NZ$M
1–2 Years
NZ$M
2–5 Years
NZ$M
Over 5 Years
NZ$M
Bank loans627325302
Capital notes217559072
Private placements332170162
Other loans55
Borrowings – principal cash flows1,18160585536
Gross settled derivatives – to pay(709)(125)(347)(237)
Gross settled derivatives – to receive666125324217
Debt derivatives financial instruments
– principal cash flows
(43)(23)(20)
Total principal cash flows1,13860562516
Contractual interest cash flows76362119
Total lease cash flow2,0432342125071,090
Total contractual cash flows3,2573307951,0421,090
15. NET FUNDING COSTS
Interest income and expense are recognised on an accrual basis in the Consolidated Income Statement using the effective
interest method.
Interest costs relating to qualifying assets under development are capitalised as a component of the cost of development or
construction. Where funds are borrowed specifically for qualifying projects, the actual borrowing costs incurred are capitalised.
Where the projects are funded through general borrowings, the borrowing costs are capitalised based on the weighted average
cost of borrowing. Borrowing costs incurred after commencement of commercial operations are expensed in the Consolidated
Income Statement.
Funding costs also include the changes in fair value relating to derivatives used to manage interest rate risk, and the associated
changes in fair value of the borrowings designated in a hedge relationship attributable to the hedged risk.
2026
NZ$M
2025*
NZ$M
Interest income(3)(6)
Interest on borrowings and derivatives64 96
Interest capitalised to balance sheet(14)(13)
Net interest income on pension assets(7)(7)
Other interest expense8 7
Net interest expense48 77
Changes in fair value relating to:
Borrowings designated in a hedging relationship(10)(18)
Derivatives designated in a hedging relationship10 18
Total changes in fair value
Bank fees, registry and other expenses1 1
Line fees15 16
Debt restructure fees9 11
Net funding costs73 105
Net funding costs from continuing operations64 93
Net funding costs from discontinued operations9 12
* Comparatives have been represented, refer to note 2.1.
Included in interest on borrowings and derivatives is the net settlement of the Group’s interest derivatives. This consists of
$19 million of interest income and $25 million of interest expense (2025: $34 million interest income; $42 million interest expense).
Other expenses include credit valuation adjustments (CVA)/debit valuation adjustments (DVA) on derivatives and interest on
deferred settlements.
48
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Capitalisation of borrowing costs
The Group funds capital projects with general borrowings and, where newly acquired or constructed assets meet qualifying criteria
of NZ IAS 23 Borrowing costs, interest costs have been capitalised to their cost at a weighted average capitalisation rate of 4.36%
(2025: 5.62%), resulting in $14 million of capitalised borrowing costs in the year ended 30 June 2026 (2025: $13 million). The
capitalised amount mainly relates to Laminex® New Zealand’s Taupō manufacturing plant ($14 million).
Interest rate risk
At 30 June 2026, 77% of the Group’s debt was subject to a fixed interest rate (2025: 59% fixed).
(i) Interest rate repricing
The following tables set out the interest rate repricing profile of interest bearing financial liabilities assuming floating rate facilities are
utilised to maintain debt levels.
2026
NZ$M
2027
NZ$M
2028
NZ$M
2029
NZ$M
2030
NZ$M
2031
NZ$M
Fixed financial liabilities 61129333
Floating financial liabilities178496756789789789
Economic Debt789789789789789789
% Fixed77%37%4%
The Group’s overall weighted average interest rate (based on year-end borrowings) excluding fees is 5.46% (2025: 5.60%).
(ii) Interest rate risk
It is estimated a 100 basis point increase in interest rates would result in an increase in the Group’s interest costs by approximately
$2 million pre-tax on the Group’s debt portfolio exposed to floating rates at balance date (2025: $8 million) assuming that all other
variables remain constant.
16. FINANCIAL RISK MANAGEMENT
Exposures to credit, liquidity, foreign currency, interest rate and commodity price risks arise in the normal course of the Group’s
business. The principles under which these risks are managed are set out in policy documents approved by the Board. The policy
documents identify the risks and set out the Group’s objectives, policies and processes to measure, manage and report the risks.
The policies are reviewed periodically to reflect changes in financial markets and the Group’s businesses.
Derivative financial instruments, including forward foreign exchange contracts, interest rate swaps, foreign currency swaps, cross
currency interest rate swaps, options, forward rate agreements and commodity price swaps are utilised to reduce exposure to
market risks. All the Group’s derivative financial instruments are held to hedge risk on underlying assets, liabilities, and forecast and
committed trading and funding transactions. The Group policy specifically prohibits the use of derivative financial instruments for
trading or speculative purposes.
Derivative financial instruments and hedge accounting
Derivatives are recorded at fair value with the resulting gain or loss on remeasurement recognised in the Consolidated Income
Statement unless the derivative is designated into an effective hedge relationship as a hedging instrument, in which case the timing
of recognition in the Consolidated Income Statement depends on the nature of the designated hedge relationship. For a derivative
instrument to be classified and accounted for as a hedge, it must be highly correlated with, and effective as a hedge of the
underlying risk being managed. This relationship is documented from inception of the hedge. The fair values of derivative financial
instruments are determined by applying quoted market prices, where available, or by using inputs that are observable for the asset
or liability.
The Group may designate derivatives as:
−Fair value hedges (where the derivative is used to manage the variability in the fair value of recognised assets and liabilities);
−Cash flow hedges (where the derivative is used to manage the variability in cash flows relating to recognised liabilities or forecast
transactions); or
−Net investment hedges (where borrowings or derivatives are used to manage the risk of fluctuation in the translated value of its
foreign operations).
The Group holds derivative instruments until expiry except where the underlying rationale from a risk management point of
view changes, such as when the underlying asset or liability that the instrument hedges no longer exists, in which case early
termination occurs.
49
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
16.1 FOREIGN CURRENCY RISK
(i) Currency transaction risk
Foreign currency transaction risk arises from foreign currency denominated revenue, expenditure, capital expenditure and other
committed transactions. The Group manages this risk using foreign exchange forward contracts and options to hedge material foreign
currency exposures. The majority of these transactions have maturities of less than one year from the reporting date.
Cash flow hedge accounting is applied to forecast transactions and short-term intra-Group cash funding. The Group designates the
spot element of foreign exchange forwards and swaps to hedge its currency risk and applies a hedge ratio of 1:1. The Group’s policy
is for the critical terms of the foreign exchange forwards and swaps to align with the hedged item. The main currency hedged is the
Australian dollar. The gross value of these foreign exchange derivatives at 30 June 2026 was $473 million (2025: $645 million).
(ii) Currency translation risk
Foreign currency translation risk arises from the translation of the Group’s foreign operations, assets and liabilities into New Zealand
dollars for reporting purposes. The Group manages this risk through the currency composition of its borrowings. Where required,
derivative instruments may be used and they are designated as net investment hedges.
No derivative instruments were used to manage currency translation risk as at 30 June 2026. The Group’s Australian subsidiary had
Australian dollar denominated debt of $150 million as a natural hedge of the Group’s investment in its Australian operations.
16.2 INTEREST RATE RISK
Interest risk is the risk that the value of borrowings or cash flows associated with the borrowings will change due to changes in market
rates. The Group manages the fixed interest rate component of its borrowings by entering into CCIRS, interest rate swaps, forward rate
agreements and options. The Group maintains an appropriate mix of fixed and floating rate borrowings, with a minimum fixed interest
rate cover of 20% over the next three years.
Cash flow hedge accounting is applied to interest rate swaps designated as hedges of floating-rate borrowings. The Group applies
a hedge ratio of 1:1. There was no material hedge ineffectiveness recognised in the Consolidated Income Statement during the year.
At 30 June 2026, the notional principal amount of interest rate swaps designated in hedge relationships was $449 million (2025:
$378 million). The hedging loss recognised in Other Comprehensive Income was $5 million (2025: $14 million).
The impact of debt hedging activities on borrowings
Underlying borrowing exposureEconomic debt exposure
2026
Fixed rate
NZ$M
Floating rate
NZ$M
Fixed rate
NZ$M
Floating rate
NZ$M% Fixed
New Zealand Dollar1624365623694%
Australian Dollar1914914226%
Total16262761117877%
16.3 COMMODITY PRICE RISK
Commodity price risk arises from committed or highly probable trade transactions that are linked to commodities. The Group
manages its commodity price risks through negotiated supply contracts and, for certain commodities, by using commodity price
swaps and options.
Cash flow hedge accounting is applied to commodity derivative contracts. At 30 June 2026, the Group has hedged a portion of its
electricity and diesel usage for the period 1 July to 31 December 2030 and 30 June 2027 respectively. The average hedged electricity
price is NZ$144/MWh and the average hedged diesel price (ex-Singapore) is NZ$1.06/Litre.
A 10% increase in the New Zealand electricity spot price at balance sheet date would result in an increase to equity of approximately
$2 million and no material impact on the Consolidated Income Statement.
A 10% increase in the New Zealand diesel spot price at balance sheet date would not have a material impact on the Group’s earnings
or equity position.
16.4 CREDIT RISK
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group’s exposure to credit risk arises primarily from receivables from customers, derivative financial instruments and
the investment of cash.
The Group manages credit risk through customer credit assessments, ongoing monitoring of receivable balances and limits on
exposures to financial institutions. Owing to the Group’s industry spread at balance date, there were no significant concentrations
of credit risk in respect of trade receivables. Refer to note 7 for debtor balances and ageing analysis.
50
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
(i) Impairment of financial assets
The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected loss
allowance for all trade receivables. The identified impairment loss for cash and cash equivalents was immaterial.
Expected credit losses are estimated using historical loss experience, adjusted where appropriate for current and forward-looking
information. The Group has identified the GDP and the unemployment rate of the countries in which it sells its goods and services
to be the most relevant factors.
The table below provides movement in the Group’s expected credit loss provision:
2026
NZ$M
2025
NZ$M
Opening provision for expected credit losses(16)(15)
Receivables written off during the year as uncollectible1 3
Increase in provision for doubtful debts recognised in the
Consolidated Income Statement
(4)
Closing provision for expected credit losses(15)(16)
Trade receivables are written off where there is no reasonable expectation of recovery.
(ii) Derivative financial instruments and the investment of cash
The Group enters into derivative financial instruments and invests cash with counterparties that are subject to Board-approved credit
limits. There were no significant concentrations of credit risk in respect of these financial instruments and no material credit losses are
expected. The carrying amount of non-derivative financial assets represents the maximum credit exposure.
16.5 FAIR VALUES
The estimated fair value measurements for financial assets and liabilities compared to their carrying values in the Consolidated
Balance Sheet, are as follows:
20262025
Classification
Carrying
value
NZ$M
Fair value
NZ$M
Carrying
value
NZ$M
Fair value
NZ$M
Financial assets
Cash and liquid depositsAmortised cost 145 145 139 139
DebtorsAmortised cost 764 764 743 743
Forward exchange contracts – fair value through profit or lossFair value 4 4 1 1
Forward exchange contracts – cash flow hedgeFair value 4 4 5 5
Cross currency interest rate swaps – split designationFair value 26 26
Cross currency interest rate swaps – cash flow hedgeFair value 11 11
Interest rate swaps – cash flow hedgeFair value
Commodity price swaps – cash flow hedgeFair value 2 2 8 8
Total financial assets 919 919 933 933
51
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
20262025
Classification
Carrying
value
NZ$M
Fair value
NZ$M
Carrying
value
NZ$M
Fair value
NZ$M
Financial liabilities
Creditors and accrualsAmortised cost 848 848 1,002 1,002
Bank loansAmortised cost 619 619 627 627
Private placementsAmortised cost 323 339
Other loansAmortised cost 8 8 5 5
Capital notesAmortised cost 162 165 217 211
Forward exchange contracts – fair value through profit or lossFair value 1 1 5 5
Forward exchange contracts – cash flow hedgeFair value3 3 2 2
Cross currency interest rate swaps – split designationFair value 5 5
Interest rate swaps – cash flow hedgeFair value5 5 10 10
Commodity price swaps – cash flow hedgeFair value 6 6 3 3
Total financial liabilities1,652 1,655 2,199 2,209
Total financial instruments(733)(736)(1,266)(1,276)
Fair value measurement
All of the Group’s derivatives are in designated hedge relationships and are measured and recognised at fair value.
All derivatives are level 2 valuations based on accepted valuation methodologies. Forward exchange fair value is calculated using
quoted forward exchange rates and discounted using yield curves derived from quoted interest rates matching maturity of the
contract. The fair value of commodity price swaps is measured using a derived forward curve and discounted using yield curves
derived from quoted interest rates matching the maturity of the contract.
Interest rate derivatives are calculated by discounting the future principal and interest cash flows at current market interest rates
that are available for similar financial instruments.
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) other
than quoted prices included within level 1.
Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Fair value disclosures
The fair values of borrowings used for disclosure are measured under level 2, by discounting future principal and interest cash flows
at the current market interest rate plus an estimated credit margin that is available for similar financial instruments with a similar credit
profile to the Group.
The interest rates across all currencies used to discount future principal and interest cash flows are between 3.9% and 6.1% (2025: 1.8%
and 8.1%) including margins, for both accounting and disclosure purposes.
52
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Group Structure and Related Parties
This section details the Group’s capital, non-controlling interest of subsidiaries, investments in associates and joint ventures and
information relating to transactions with other related parties.
17. DIVIDENDS AND SHAREHOLDER TAX CREDITS
Dividends
2026
NZ$M
2025
NZ$M
Full year dividend declared/paid
The Board determined that it would not declare a final dividend for the 2026 financial year.
Shareholder tax credits
Imputation and franking credits allow the Company to transfer the benefit from the tax it has paid in New Zealand and Australia
respectively to its shareholders when it pays dividends.
2026
NZ$M
2025
NZ$M
Imputation credit account
Imputation credits at the beginning of the year 5 3
Taxation (received)/paid (3) 2
Imputation credits available for use in subsequent accounting periods2 5
2026
A$M
2025
A$M
Franking credit account
Franking credits at the beginning of the year 38 38
Franking credits available for use in subsequent accounting periods38 38
18. CAPITAL
Ordinary shares are classified as shareholders’ funds. Costs directly attributable to the issue of new shares or options are shown in
shareholders’ funds as a reduction from the proceeds. Acquired shares are classified as treasury stock and presented as a deduction
from share capital under the treasury stock method, as if the shares are cancelled, until they are reissued or otherwise disposed of.
2026
NZ$M
2025
NZ$M
Reported capital at the beginning of the year excluding treasury stock3,680 2,995
Issue of shares679
Vested share-based payment7 6
Reported capital at the end of the year excluding treasury stock3,687 3,680
All ordinary shares are issued and fully paid and carry equal rights in respect of voting, dividend payments and distribution upon
winding up.
20262025
Number of ordinary shares issued and fully paid
Number of shares on issue at the beginning of the year1,074,897,372 783,043,596
Issue of shares*664,395 291,853,776
Total number of shares on issue1,075,561,767 1,074,897,372
Less shares accounted for as treasury stock(3,413,220)(4,303,432)
1,072,148,547 1,070,593,940
* The 664,395 shares issued during the year relate to award shares that vested under the FBuShare employee share purchase scheme. The associated equity movement is included
in vested share-based payment.
53
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
19. NON-CONTROLLING INTERESTS
Non-controlling interests are allocated their share of profit for the year in the Consolidated Income Statement and are presented
separately within equity in the Consolidated Balance Sheet. The effect of all transactions with non-controlling interests that change
the Group’s ownership interest but do not result in a change in control are recorded in equity.
2026
NZ$M
2025
NZ$M
Share capital9 9
Reserves(9)(4)
5
20. INVESTMENTS IN ASSOCIATES, JOINT VENTURES AND JOINT OPERATIONS
A joint arrangement is an arrangement where two or more parties have joint control. The Group classifies its joint arrangements
as either joint operations or joint ventures depending on the legal, contractual and other rights and obligations.
Equity accounting
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses of the investee in the Consolidated Income Statement, and the Group’s share
of movements of the investee’s other comprehensive income in the Consolidated Statement of Comprehensive Income. Dividends
received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the other entity.
Investment in joint ventures and associates
Investments in associates and joint ventures are measured using the equity method. The equity method has been used for associate
entities over which the Group has significant influence but not control.
Joint operations
The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly
held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the consolidated financial statements
under the appropriate headings.
2026
NZ$M
2025
NZ$M
Investment by associate/joint venture:
Wespine Industries Pty Ltd84 70
Hexion Australia Pty Ltd 28 25
Altus® NZ Limited80 80
NX2 Hold LP 23
Other 24 20
216 218
Equity-accounted earnings comprise:
Sales – 100%446 469
Earnings before taxation – 100%41 48
Earnings before taxation – Fletcher Building share21 13
Taxation expense(6)(3)
Earnings after taxation – Fletcher Building share15 10
54
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Interest in joint operations
The Group recognises its interest in the assets, liabilities, revenue and expenses of joint operations.
Name of joint operationPrincipal activity
Principal place of
business
2026
%
2025
%
Liveable StreetsMaintenanceAuckland50%
P2W Construction JVConstructionAuckland50%50%
Eastern Busway AllianceConstructionAuckland60%
Waterview Connection Joint OperationsMaintenanceAuckland23%
Hamilton Expressway ConstructionWaikato61%
Mackays to Peka Peka ConstructionWellington75%75%
Transport Rebuild East CoastMaintenance Hawke's Bay33%
21. RELATED PARTY DISCLOSURES
The disclosures below set out transactions and outstanding balances that Group companies and other related parties have with
each other.
Key management personnel are defined as the Executive Committee and Board of Directors.
2026
Sales to
related parties
NZ$M
Purchases from
related parties
NZ$M
Amounts owing
from related
parties (within
debtors)
NZ$M
Amounts owing
to related parties
(within creditors)
NZ$M
Wespine Industries Pty Ltd and Hexion Australia Pty Ltd 46 8
Altus® NZ Limited 7 1
Others5 13
2025
Wespine Industries Pty Ltd and Hexion Australia Pty Ltd397
Altus® NZ Limited5
NX2 Hold LP(10)
Higgins Fiji5
Others4121
As at 30 June 2026, the Group held no material cash deposits on behalf of the alliance/joint operation (Mackays to Peka Peka).
The Group holds 75% interest in this alliance/joint operation.
2026
NZ$M
2025
NZ$M
Key management personnel compensation
Directors' fees1 2
Executive committee remuneration paid, payable or provided for:
Short-term employee benefits12 13
Long-term employee benefits(1)
Termination benefits4
Fletcher Building Retirement Plan
As of 30 June 2026, Fletcher Building Nominees Limited, as trustee of the New Zealand retirement plan, held no shares
in Fletcher Building Limited (2025: nil).
55
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Other Information
This section provides additional required disclosures that are not covered in the previous sections.
22. CAPITAL EXPENDITURE COMMITMENTS
Capital expenditure commitments are those where future expenditure has been committed at year end, but not recognised
as liabilities as follows:
2026
NZ$M
2025
NZ$M
Committed at year end
Property, plant and equipment and other long-term assets63111
23. CONTINGENT LIABILITIES
Contingent liabilities are possible legal or constructive obligations arising from past events and whose existence will be confirmed
only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
A contingent liability may also be a present obligation arising from past events but is not recognised on the basis that an outflow of
economic resources to settle the obligation is not viewed as probable, or the amount of the obligation cannot be reliably measured.
When the Group has a present obligation, an outflow of economic resources is assessed as probable and the Group can reliably
measure the obligation, a provision is recognised.
The Group, in the normal course of business, may be subject to legal claims and other exposures in respect of which no provision
has been made. Obligations assessed as having probable future economic outflows capable of reliable measurement are recognised
as provisions at reporting date. Matters assessed as having possible future economic outflows, where the outflows are capable of
reliable measurement, are disclosed as contingent liabilities. Contingent liabilities that cannot be reliably quantified are described
but not included in the total amount disclosed below.
Individually significant matters, including narrative on potential future exposures incapable of reliable measurement, are disclosed
below, to the extent that disclosure does not prejudice the Group.
Guarantees
In certain circumstances, the Group guarantees the performance of particular business units in respect of their obligations. This
includes bonding and bank guarantee facilities used primarily by the construction business as well as performance guarantees for
certain of the Group’s subsidiaries.
Contingent liabilities in relation to guarantees, quantifiable claims and others
2026
NZ$M
2025
NZ$M
Contingent liabilities with respect to guarantees extended on trading transactions,
performance bonds and other transactions
142241
Contingent liabilities with respect to quantifiable claims5030
192271
Class action proceedings: Western Australia plumbing failures
On 6 August 2024, the Group announced that a class action proceeding had been filed in the Federal Court of Australia against
Iplex® Pipelines Australia (Iplex® Australia), on behalf of persons, Australia-wide, who acquired polybutylene pipes manufactured by
Iplex® Australia composed of a resin known as Typlex-1050. The class action alleges that the Pro-fit product was not of acceptable
quality at the time of supply and seeks a broad range of damages (unquantified), including: costs of removing, repairing, replacing
and disposing of the affected pipe; repair costs and/or possession damaged by the affected pipe; reduction in property value,
vexation, distress and disappointment. Iplex® Australia is defending the action and has brought cross-claims against certain
WA builders and plumbers.
On 27 August 2024, the Group announced that Western Australian home builder, BGC, had filed legal proceedings against Iplex®
Australia in relation to the Pro-Fit pipes issues, making similar allegations to those raised in the class action. Iplex® Australia is
defending the BGC proceedings. On 12 December 2025, Fletcher Building was joined as a respondent to this proceeding.
An additional claim has been filed by one homeowner in the WA District Court against both BGC and Iplex® Australia. This claim
was recently joined to the Federal Court proceedings and stayed.
The Federal Court proceedings are in the discovery phase and are expected to remain in that phase for at least the rest of the
calendar year. They have also been listed for a preliminary 12-week trial commencing on 8 May 2028.
56
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
The outcome of these proceedings and associated liabilities, if any, remains uncertain at the date of this report. Ultimately, if Iplex®
Australia is found to bear full or part responsibility for the amounts claimed, the cost to it in meeting any damages claims could have
a material impact on the Group’s financial position. It is not practicable as at 30 June 2026 to provide an estimate of the financial
effect, including any quantum of costs or any penalty, or the timing of their incurrence, and disclosure of any possible impact would
be materially prejudicial to the Group’s commercial interests.
Commerce Commission Winstone Wallboards® proceedings
On 1 November 2024, the Group announced that the New Zealand Commerce Commission had filed legal proceedings against
Winstone Wallboards®, seeking declarations that Winstone Wallboards® contravened the Commerce Act 1986 in relation to its
historical use of volume rebates, together with associated civil pecuniary penalties.
As previously reported, the volume rebates were discontinued by Winstone Wallboards® in 2022. Winstone Wallboards® remains
of the opinion that its previous use of volume rebates, which are widespread in the industry, did not breach the Commerce Act
and is defending the proceedings.
The proceedings are progressing in accordance with the Court timetable, with trial currently scheduled to commence at the
Auckland High Court on 5 July 2027.
The claims made by the Commission remain subject to substantive dispute and are being actively defended, but cannot be
quantified at this time. As at 30 June 2026 and at this stage, it is not practicable to provide, in relation to these proceedings:
(a) an estimate of financial effect; (b) an indication of the uncertainties in relation to the amount or timing of any outflow; or
(c) the possibility of any pecuniary penalty.
Class action proceedings: Building + Interiors disclosures
On 13 March 2023, the Group announced that class action proceedings had been filed against it in the Supreme Court of Victoria
making allegations that between 17 August 2016 and 23 October 2017 the Group misrepresented the performance and financial
position of its Building + Interiors (B+I) business and failed to disclose information as to its true financial position. The claim is
brought on behalf of shareholders who acquired an interest in fully paid ordinary shares in the Group on the Australian Securities
Exchange or NZX Main Board between those dates. The Group is defending the proceedings. Based on current status of the
proceedings, the claims made on behalf of shareholders have not yet been and are not required to be quantified. As at 30 June
2026, it is not practicable to provide: (a) an estimate of the financial effect; (b) an indication of the uncertainties relating to the
amount or timing of any outflow; or (c) the possibility of any reimbursement.
24. TAXATION
The provision for current tax is the estimated amount due for payment during the next 12 months by the Group. The provision for
deferred tax has been calculated using the balance sheet liability method.
Deferred tax is recognised on tax losses, tax credits and on the temporary difference between the carrying amount of assets and
liabilities and their taxable value where recovery is considered probable. Deferred tax is not recognised on the following temporary
differences:
−The initial recognition of goodwill; and
−The initial recognition of asset and liabilities for a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting nor taxable profit or loss.
There are no significant deferred tax liabilities in respect of the undistributed profits of subsidiaries and associates.
Judgements are required about the application of income tax legislation. These judgements and assumptions are subject to risk and
uncertainty as there is a possibility of future changes in the interpretation and/or application of tax legislation. This may impact the
amount of current and deferred tax assets and liabilities recognised in the Consolidated Balance Sheet and the amount of other tax
losses and temporary differences not yet recognised. In such circumstances, some or all of the carrying amounts of recognised tax
assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the Consolidated Income Statement.
The Group has assessed the impact of the OECD Pillar Two Global Minimum Tax rules and the legislation enacted in jurisdictions
in which it operates. Based on this assessment, the Group qualifies for one or more of the available transitional safe harbour
provisions in all jurisdictions for the reporting period. Accordingly, no material Pillar Two top-up tax liability is expected to arise
in respect of the year ended 30 June 2026, and no provision has been recognised in these financial statements. The Group will
continue to monitor developments in Pillar Two legislation and the ongoing applicability of the safe harbour provisions in future
reporting periods.
57
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Below is the reconciliation of earnings before taxation to taxation expense:
2026
NZ$M
2025
NZ$M
Earnings/(losses) before taxation - continuing operations248 (391)
Taxation at 28 cents per dollar69 (109)
Adjusted for:
Difference in tax rates1 (2)
Non-assessable income(6)(6)
Non-deductible expenses2 56
Tax losses for which no deferred tax asset was previously recognised(15)
Tax in respect of prior years(10)(2)
Tax expense/(benefit) on earnings - continuing operations41 (63)
Income tax expense/(benefit) on continuing operations is attributable to:
Tax on earnings before Significant Items*54 40
Tax benefit on Significant Items*(13)(103)
Tax expense/(benefit) on earnings - continuing operations41 (63)
Income tax expense/(benefit) on discontinued operations is attributable to:
Tax expense/(benefit) on earnings before Significant Items7 8
Tax benefit on Significant Items(35)(14)
Tax benefit on earnings - discontinued operations(28)(6)
Income tax expense/(benefit) is attributable to:
Total current taxation expense/(benefit)9
Total deferred taxation expense/(benefit)4 (69)
Tax expense/(benefit) on earnings13 (69)
* Comparatives have been represented, refer to note 2.1.
Current tax assets
Included within the Consolidated Balance Sheet as follows:
Current tax assets20 29
20 29
Movement in current tax assets during the year:
Opening provision for current tax assets29 28
Current period tax benefit(2)(8)
Prior period adjustments(6)8
Non-controlling interest share of taxation expense3 1
Tax recognised directly in reserves 1
Net tax payments(3)
Currency movement(1)(1)
20 29
Provision for deferred tax assets
Included within the Consolidated Balance Sheet as follows:
Deferred tax assets225 209
225 209
58
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2026
NZ$M
2025
NZ$M
Movement in deferred tax assets during the year:
Opening deferred tax assets209 136
Current period deferred tax benefit(20)75
Classified as held for sale3
Prior period adjustment18 (3)
Tax recognised directly in reserves1 2
Currency movement14 (1)
225 209
Composed of:
Provisions and other liabilities170 146
Inventories16 14
Debtors4 5
Property, plant and equipment(70)(67)
Brands(64)(63)
Tax losses103 117
Right-of-use assets(272)(345)
Lease liabilities338 408
Other (6)
225 209
The net deferred tax asset balance of $225 million at 30 June 2026 (2025: $209 million) largely comprises New Zealand and Australia
carried forward tax losses incurred in the current and prior periods, timing differences on the Group’s provisions and net deferred tax
asset on the Group’s right-of-use assets/liabilities. It is expected there will be sufficient future earnings in New Zealand and Australia
to utilise the deferred tax asset in each of these jurisdictions.
25. RETIREMENT PLANS
Fletcher Building Limited is the principal sponsoring company of a plan that provides retirement and other benefits to employees of
the Group in New Zealand and Australia. Participation in this plan has been closed for a number of years, although defined contribution
savings plans have been made available.
The Group’s plan assets and liabilities in respect of individual defined benefit retirement plans are calculated separately for each
plan by an independent actuary, as being the fair value of the plan’s assets less the present value of the future obligations to the
members. The value of the asset recognised cannot exceed the present value of any future refunds from the plans or reductions
in future contributions to the plans, unless a constructive right to a refund of the surplus exists, in which case the amount to be
refunded is recognised as an asset. In the Group’s balance sheet, plans that are in a surplus position are not offset with plans that
are in a liability position. The refund of the New Zealand surplus is subject to Financial Markets Authority (FMA) approval under
FMCA 2013 Section 177.
Principal assumptions made in the actuarial calculation of the defined benefit obligation relate to the discount rate, rate of salary
inflation and life expectancy. The calculation of the defined benefit obligations is based on years of service and the employees’
compensation during their years of employment. Contributions are intended to provide not only for benefits attributed to service
to date but also for those expected to be earned in the future. A discount rate of 4.62% has been applied in 2026 on benefit
obligations (2025: 4.52%). In applying sensitivity analysis, a 1% lower discount rate assumption increases the defined benefit
obligation by $10 million (2025: $11 million), whilst adding one additional year of life expectancy of scheme members decreases
the obligation by $7 million (2025: $7 million decrease).
The following table provides the weighted average assumptions used to develop the net periodic pension cost and the actuarial
present value of projected benefit obligations for the Group’s plans:
2026
%
2025
%
Assumed discount rate on benefit obligations4.624.52
Annual rate of increase in future compensation levels2.362.30
59
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Fletcher Building Limited has an obligation to ensure that the funding ratio of the New Zealand plan’s assets is at least 115% of the
plan’s actuarial liability. At 31 March 2026, the value of the plan assets was 211% of the actuarial liability and the funded surplus was
$147 million (31 March 2025: 210%, $153 million). The Pension Plan Trust Deed permits the Trustees to grant discretionary additional
benefits of up to one month’s pension annually, conditional on maintaining a minimum post-payment funding ratio of 140%. Any
residual surplus on wind-up remains attributable to the Company, subject to FMA approval.
During the year the Group contributed less than $1 million (2025: less than $1 million) in respect of its Australian defined benefit plans.
The Group is currently not contributing to the New Zealand plan. It contributed $59 million (2025: $56 million) in respect of its defined
contribution plans worldwide, including Kiwisaver and Australia Superannuation.
2026
NZ$M
2025
NZ$M
Recognised net asset
Assets of plans350363
Projected benefit obligation(202)(213)
Funded surplus148150
Asset ceiling effect
Recognised net asset148150
Movement in recognised net asset
Recognised net asset at the beginning of the year150152
Actuarial movements for the year(6)(7)
Net periodic pension cost45
Recognised net asset148150
Assets of the plans
Assets of plans at the beginning of the year363367
Actual return on assets825
Total contributions11
Benefit payments(22)(30)
350363
Assets of the plans consist of:
Australasian equities2627
International equities104103
Property22
Bonds162164
Cash and short-term deposits3948
Other assets1719
350363
Projected benefit obligation
Projected benefit obligation as at the beginning of the year(213)(215)
Service cost(2)(2)
Interest cost(9)(10)
Actuarial loss arising on changes in demographic assumptions (10)
Member contributions(1)(1)
Actuarial loss arising on changes in financial assumptions(2)(3)
Actuarial loss arising on other assumptions - experience adjustments (3)
Benefit payments22 29
Currency translation3 2
(202)(213)
Amounts recognised in the Consolidated Income Statement
Service cost - recognised in earnings before interest and taxation(2)(2)
Net interest income - recognised in funding costs77
Net periodic pension income55
60
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
26. SHARE-BASED PAYMENTS
The Group has a number of employee incentive schemes, and whilst some are offered to all employees, others are offered only
to specific individuals.
All schemes are equity-settled share-based payment arrangements, accounted for under NZ IFRS 2 Share-based Payments and are
measured at fair value at grant date. The fair value of shares or options granted to employees is recognised as an employee expense
in the Consolidated Income Statement over the restrictive period, with the restrictive period being the period over which the service
requirement of the particular scheme is met, with a corresponding increase in the employee share-based payment reserve.
When shares or options vest and shares are awarded to employees, the amount in the share-based payment reserve relating to those
instruments is transferred to share capital. When share-based payments do not vest as a result of market conditions not being met,
the amount in the share-based payment reserve is reclassified to retained earnings. When share-based payments do not vest due
to a performance condition not being met, any amount previously recognised is released to the Consolidated Income Statement.
Long-term incentive (LTI) share scheme
The Group has a long-term share-based performance incentive scheme targeted at selected employees most able to influence the
results of the Group (invited to participate at the discretion of the Company). The aim is to drive long-term, sustainable results and
create shareholder value by aligning our most senior people with the shareholders’ interests.
The long-term share scheme allows scheme participants to acquire shares in the Company at market value (i.e. face value at the time
of grant), funded by an interest-free loan from the Group. The scheme participants are entitled to vote on the shares and to receive
cash dividends, the proceeds of which are used to reduce the loan. The shares are held in trust for the scheme participants by the
Trustee, Fletcher Building Share Schemes Limited.
Entitlement under the scheme for the 2023 and 2024 offers is dependent upon the Group’s relative Total Shareholder Return (rTSR)
exceeding the 51st percentile of an Australasian comparator group and Return on Funds Employed (ROFE) exceeding the Group’s
Weighted Average Cost of Capital (WACC) over a three-year restricted period.
At the end of the restrictive period, the Group will pay a bonus to the executives to the extent that performance hurdles have been
met, the after-tax amount of which will be generally sufficient for the scheme participants to repay the balance of the loan in respect
of the shares which are to be transferred.
If the performance hurdles are not met or are only partially met and the shares do not transfer to the scheme participants, the amount
in the share-based payments reserve will remain in equity and will not be released to earnings, with the trustee acquiring the beneficial
interest in some or all of the relevant shares. The loan provided in respect of those shares which do not transfer to the scheme
participants (the forfeited shares) will be novated to the trustee and will be fully repaid by the transfer of the forfeited shares.
During the 2025 calendar year, the relative Total Shareholder Return measure was replaced with an absolute Total Shareholder
Return (aTSR) measure and the Return on Funds Employed (ROFE) measure was replaced with Return on Invested Capital (ROIC).
These performance measures are equally weighted at 50% each and vest on a straight-line basis between threshold and maximum
performance levels. The aTSR measure includes an above-target performance opportunity, allowing vesting of up to 110%, whereas
vesting under the ROIC measure is capped at 100% for maximum performance.
The following are details with regard to the scheme:
2025
Award
2024
Award
2023
Award
2022
Award
2021
Award
Grant date1 July 20251 September 20241 September 20231 September 20221 July 2021
Number of shares granted1,637,8631,302,514776,435638,499395,085
Market price per share at grant date$3.14$2.96$4.88$5.61$7.48
Total value at grant date (NZ$)$5,142,890$3,855,441$3,789,003$3,581,979$2,955,236
Vesting date30 June 202831 August 202731 August 202631 August 202530 June 2024
Number of shares:
Number of shares originally granted1,637,8631,302,514745,440616,654395,085
Additional shares granted30,99521,845
Less: forfeited/unvested over
life of scheme
(67,678)(139,051)(333,623)(638,499)(395,085)
Less: vested over life of scheme
Number of shares held
at 30 June 2026
1,570,1851,163,463442,812
Cumulative number of shares held3,176,4601,606,275442,812
61
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
2026
NZ$M
2025
NZ$M
Total fair value expense in year for LTI (1)
Amount recognised at year end in the share based payment reserve3 5
Fair value for the 2025 scheme has been determined using the Binomial Option Pricing model.
Deferred short-term incentive (STI) plan
A senior short-term incentive (STI) share-based payment scheme has been put in place for selected senior employees (invited to
participate at the discretion of the Company), which is recognised on the achievement of the Group and individual performance
objectives using a balanced scorecard. The aim is to align the financial interests of participating senior employees with the Company’s
shareholders and recognise the differing priorities, and development phases in which our businesses are operating through individual
targets and measures.
The scheme’s grant date is 1 July each year, with 1 July 2021 being the first scheme offered. Following the release of the final audited
financial year results, the selected employees’ STIs are split between a cash payment and a deferred STI portion entitling the employee
to share rights. Achievement is calculated based on various non-market conditions specific to the individual business improvement,
safety goals, as well as financial goals. Performance is assessed against the applicable non-market conditions one year after the
grant date, generally in September, with the cash component settled at this time. The share rights portion of the award converts into
Fletcher Building ordinary shares two years from achievement date, where the number of share rights awarded is determined based on
the share price at 30 June, one year after grant date. For most employees, the award is subject to the participant remaining employed
with the Group for three years.
2026
NZ$M
2025
NZ$M
Total fair value expense in year for deferred STI(1)(1)
Employee retention share scheme
The employee retention share scheme is a one-off share-based arrangement granted to certain senior management and executives as
a targeted retention measure. The total fair value expense recognised in respect of this scheme was less than $500,000 in each of the
two financial years presented.
Employee share purchase scheme – FBuShare
FBuShare is Fletcher Building’s employee share purchase scheme available to all eligible Group employees. The plan aims to connect
our people with our performance, and to promote employee engagement and retention. Employees purchase Fletcher Building shares
(purchased shares) at market prices and, if they continue to be employed after a three-year qualification period, they become entitled
to receive one bonus award share for every two shares purchased in the first year of each qualification period and still owned at the
end of that period. FBuShare does not require any performance criteria to be met. FBuShare has a minimum contribution rate of
NZ$250 per annum and a maximum contribution rate of NZ$5,000 per annum (or the equivalent currency in other countries) of the
employees after-tax pay. Directors are not eligible to participate in FBuShare.
Dividends paid will be re-invested in additional shares. Employees will receive award shares on any additional shares, subject to the
same conditions set out above. The employees are responsible for any income tax liability payable on dividends and on the value
of any award shares.
At the end of each three-year qualification period, employees may continue to hold any purchased, additional and award shares or
they may sell some or all of the shares.
During the year, approximately 0.6 million award shares vested. At 30 June 2026, approximately 1.5 million shares would be required
to satisfy the obligation to provide award shares to FBuShare participants based on the purchased share balances. No new FBuShare
offer was made during the year.
2026
NZ$M
2025
NZ$M
Total fair value expense in year for employee share purchase scheme(2)
62
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
27. SUBSEQUENT EVENTS
Government support for Golden Bay Cement®
Subsequent to the reporting date, Golden Bay Cement® and the New Zealand Government entered into an agreement under which the
Government will provide up to $60 million of support for the continued operation of Golden Bay Cement®’s Northland plant. Golden
Bay Cement® has committed to continue domestic cement production until at least 2040 and to invest at least $150 million through
to 2040 in continued operations, resilience and decarbonisation initiatives.
Following the agreement, Golden Bay Cement® acquired 1,051,000 New Zealand Units (NZUs) for $59.1 million and received the grant
of $59.1 million. The NZUs are expected to be used to meet Golden Bay Cement®’s Emissions Trading Scheme surrender obligations
over the period from 2030 to 2040.
This represents a non-adjusting event after the reporting period. Accordingly, no amounts relating to the agreement or the
NZU acquisition have been recognised in the consolidated financial statements as at 30 June 2026.
63
Notes to the Consolidated Financial Statements 2026 (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Independent auditor’s report to the shareholders of Fletcher Building Limited
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Fletcher Building Limited (the “Company”) and its subsidiaries (together
the “Group”) on pages 5 to 63, which comprise the consolidated balance sheet of the Group as at 30 June 2026, and the
consolidated income statement, consolidated statement of comprehensive income, consolidated statement of movements
in equity and consolidated statement of cash flows for the year then ended of the Group, and the notes to the consolidated
financial statements including material accounting policy information.
In our opinion, the consolidated financial statements on pages 5 to 63 present fairly, in all material respects, the
consolidated financial position of the Group as at 30 June 2026 and its consolidated financial performance and cash flows
for the year then ended in accordance with New Zealand Equivalents to International Financial Reporting Standards and
International Financial Reporting Standards.
This report is made solely to the Company’s shareholders, as a body. Our audit has been undertaken so that we might
state to the Company’s shareholders those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s shareholders, as a body, for our audit work, for this report, or for the opinions we have formed.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report. We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of Ethics
for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by the New Zealand
Auditing and Assurance Standards Board as applicable to audits of financial statements of public interest entities. We have
also fulfilled our other ethical responsibilities in accordance with Professional and Ethical Standard 1.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Ernst & Young provides agreed upon procedures, remuneration benchmarking, delivery of sustainability related training,
taxation compliance, financial statement preparation services and other assurance related services to the Group. Partners
and employees of our firm may deal with the Group on normal terms within the ordinary course of trading activities of the
business of the Group. We have no other relationship with, or interest in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current year. These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our opinion thereon, but we do not provide a separate opinion
on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial statements section
of the audit report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our
audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion
on the accompanying consolidated financial statements.
64
CONTENTS
Fletcher Building Limited Annual Report 2026
Independent Auditor’s Report
Provisions – Iplex® Australia Industry Response
Why significantHow our audit addressed the key audit matter
In November 2024, the Group recognised a
provision in relation to the Iplex Australia Industry
Response with a remaining balance of $151m
reported as at 30 June 2026.
NZ IAS 37 Provisions, Contingent Liabilities and
Contingent Assets provides criteria for recognition
and assessment of liabilities for such matters. The
application of this standard required significant
judgement in determining whether the provision
could be reliably measured and measurement of
the recorded provision.
There is complexity in relation to the assessment
of this matter and uncertainty as to the outcome
and quantification of associated future economic
outflow. Accordingly, we considered this to be a
key audit matter.
Disclosures regarding the provision recognised
are included in notes 2.2 and 10 of the financial
statements.
In obtaining sufficient appropriate audit evidence, we:
• evaluated the Group’s assessment as to whether a present
obligation exists arising from past events based on the available
facts and circumstances;
• in order to assess the facts and circumstances:
−held discussions with the Group’s internal and external legal
counsel;
−held discussions with management, reviewed Board and
Audit & Risk Committee papers, and attended Audit and Risk
Committee meetings to understand progress on the matter;
−considered the documentation prepared by management and
other relevant documents; and
−analysed forecast leak trend and costs against actual leak
experience and costs incurred to date.
• involved our EY specialists to consider the reasonableness of
selected leak rate assumptions adopted by management;
• evaluated the methodology adopted to calculate the provision
in accordance with relevant accounting standard, and assessed
whether the assumptions such as leak rate, leak mix, costs to
be incurred for each leak type and estimated amounts were
reasonable; and
• considered the adequacy of the associated disclosures in the
financial statements including whether they appropriately describe
the assumptions made and uncertainties in estimating the industry
response provision.
65
Independent Auditor’s Report (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Goodwill and intangible assets with indefinite useful lives impairment assessment
Why significantHow our audit addressed the key audit matter
The Group held goodwill and intangible assets
with indefinite useful lives of $653 million at
30 June 2026.
The recoverable amount of the Group’s Cash
Generating Units (“CGUs”) with Goodwill is
determined each reporting period by reference
to valuations prepared using discounted cash
flow models (“DCF models”). DCF models contain
significant judgement and estimation in respect
of future cash flow forecasts, discount rate and
terminal growth rate assumptions. Changes
in certain assumptions can lead to significant
changes in the assessment of the recoverable
amount.
Disclosures regarding the Group’s key assumptions
adopted and the sensitivity to reasonably possible
changes in key assumptions which could result in
impairment for higher risk CGUs are included in
note 2.3 of the financial statements.
In obtaining sufficient appropriate audit evidence, we:
• understood the Group's goodwill and intangible assets with
indefinite useful lives impairment assessment process and
identified relevant controls;
• assessed the Group's determination of CGUs and considered
which CGUs had a higher likelihood of impairment based on our
understanding of the nature and financial performance of the
Group's business units;
• obtained the Group's DCF models and, compared earnings before
interest and tax forecasts to the business units' FY27 budget;
• assessed key inputs to the DCF models including future cash flow
forecasts, allocation of corporate costs, discount rates and terminal
growth rates;
• considered the accuracy of previous Group cash flow forecasting
to inform our evaluation of forecasts included in the DCF models;
• for those CGUs with a higher likelihood of impairment, involved
our valuation specialists to assess the Group's discount and
terminal growth rates. Our valuation specialists were also involved
in benchmarking the Group's assessed recoverable amounts with
relevant market multiples and assessing the clerical accuracy of
the DCF models;
• performed sensitivity analysis in relation to the discount rate,
terminal growth rate and forecast cash flows to consider
the potential impact of changes in these assumptions to the
recoverable amounts;
• considered the adequacy of the associated disclosures in the
financial statements including the disclosure of the CGUs where
the impairment assessment is sensitive to reasonably possible
changes in assumptions.
66
Independent Auditor’s Report (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Information other than the financial statements and auditor’s report
The directors of the Company are responsible for the other information. The other information comprises the annual report,
which includes the Climate Statements but does not include the financial statements and our auditor’s report thereon.
We obtained the annual report other than the Climate Statements prior to the date of this auditor’s report. The Climate
Statements is expected to be made available to us after the date of this report.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon in this auditor’s report. We expect to issue a separate assurance report on Greenhouse gas
emissions included in the Climate Statements as will be explained in that assurance report.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained during the audit, or otherwise appears to be materially misstated.
If, based upon the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard. When we read the Climate Statements, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with governance and, if uncorrected, to
take appropriate action to bring the matter to the attention of users for whom our auditor’s report was prepared.
Directors’ responsibilities for the financial statements
The directors are responsible, on behalf of the entity, for the preparation and fair presentation of the consolidated financial
statements in accordance with New Zealand Equivalents to International Financial Reporting Standards and International
Financial Reporting Standards, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing on behalf of the entity the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
International Standards on Auditing (New Zealand) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located at the External
Reporting Board’s website: https://www.xrb.govt.nz/standards/assurance-standards/auditors-responsibilities/audit-
report-1-1/. This description forms part of our auditor’s report.
The engagement partner on the audit resulting in this independent auditor’s report is Graeme Bennett.
Chartered Accountants
Auckland
18 August 2026
67
Independent Auditor’s Report (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
1. CORPORATE GOVERNANCE
Fletcher Building’s Corporate Governance Statement, current as at 18 August 2026, is available on the Group’s website at
https://fletcherbuilding.com/investor-centre/corporate-governance.
During the financial year ended 30 June 2026, Fletcher Building followed all of the recommendations in the NZX Corporate
Governance Code dated March 2026 other than in the following respects (as approved by the Board):
Code PrincipleCode recommendationKey differenceCommentary
Principle 5:
The remuneration of
directors and executives
should be transparent,
fair and reasonable.
An issuer should have a
remuneration policy for
remuneration of executives which
outlines the relative weightings
of remuneration components and
relative performance criteria.
The Company’s
remuneration policy
for executives does
not outline the
relative weightings of
remuneration components
or relative performance
criteria.
Because the weightings of remuneration
components and performance criteria can
change over time, these matters are disclosed
annually through the Company’s Remuneration
Report which is considered at the Annual
Shareholders’ Meeting.
An issuer should disclose the
remuneration arrangements in
place for the CEO in its annual
report. This should include
disclosure of the base salary,
short-term incentives and
long-term incentives and the
performance criteria used to
determine performance based
payments.
The full details of the
Company’s Managing
Director are not set out
in this annual report.
The remuneration arrangements of the
Company’s Managing Director will be set
out in the Remuneration Report that will be
made available to shareholders on the Group’s
website in connection with the Company’s
2026 Notice of Annual Shareholders’ Meeting.
2. CLIMATE-RELATED DISCLOSURES
Fletcher Building’s Climate Statements are available on the Group’s website at https://fletcherbuilding.com/sustainability/
sustainability-reports-publications-and-policies. Fletcher Building will release its 2026 Climate Statements on the Group’s website
by 20 October 2026, in accordance with applicable reporting requirements.
3. DIRECTORS
The table below sets out the names of the directors of Fletcher Building as at 30 June 2026.
The Board considers that all of the directors are independent other than Andrew Reding. Andrew Reding is considered by the Board
to be a non-independent director because he is employed as the Managing Director and Chief Executive Officer of Fletcher Building.
In summary ‘independence’ means that the director is not an employee and does not have any direct or indirect position, association
or relationship that could reasonably influence, or could reasonably be perceived to influence, in a material way, the director’s
capacity to:
(a) bring an independent view to decisions in relation to Fletcher Building; or
(b) act in the best interests of Fletcher Building; or
(c) represent the interests of Fletcher Building’s financial product holders generally,
including having regard to the factors described in the NZX Corporate Governance Code that may impact on director independence,
if applicable.
DirectorRole
Peter CrowleyIndependent Chair
James Miller
(1)
Independent Deputy Chair
Andrew RedingNon-independent Managing Director
Cathy QuinnIndependent Director
Sandra DoddsIndependent Director
Tony DragicevichIndependent Director
Jacqui CoombesIndependent Director
(1) Director, appointed Deputy Chair effective 15 December 2025.
68
CONTENTS
Fletcher Building Limited Annual Report 2026
Mandatory Disclosures
DIRECTOR ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The table below shows directors’ attendance at Board and Committee meetings during the year ended 30 June 2026.
Board/Committee
Number of
meetings
heldP Crowley
(1)
C QuinnS DoddsT DragicevichA Reding
(2)
J CoombesJ Miller
(3)
Board
16
16*161516161614
Audit & Risk
5
5
#
55*5
#
1
#
5
Disclosure
10
1010*101
#
2
#
1
#
10
Nominations
2
2*1
#
1
#
1
#
22
People & Remuneration
3
2
#
33
#
3*3
Safety, Health, Environment
& Sustainability
5
4
#
5*555
#
* Chair of Board or Committee.
# Attended as an observer.
(1) Attended Committee meetings in an ex officio capacity.
(2) Attended Committee meetings at the request of the Committee, and in his capacity as an employee of the Company.
(3) Director appointed as Deputy Chair of Board and a member of People & Remuneration Committee effective 15 December 2025.
Where a director is not a member of a committee but attended meetings, they did so as an observer.
The directors’ meetings referred to in the table above do not include additional ad hoc or transactional committee meetings held
through the year.
DIRECTORS’ REMUNERATION STRUCTURE
The current total directors’ remuneration pool approved by shareholders in 2011 is $2 million per annum. Directors receive
remuneration determined by the Board, provided that the directors’ aggregate remuneration per annum does not exceed the
shareholder-approved remuneration pool. There are no schemes for retirement benefits for non-executive directors. The remuneration
scale for directors is outlined below:
Board/CommitteeRoleFY26
(1)
Board of DirectorsChair
(2)
$320,000
Deputy Chair
(3)
$200,500
Non-executive director$155,500
Audit & RiskChair$38,000
Member$19,500
DisclosureChair$20,000
Member$10,000
NominationsChair-
Member$8,500
People & RemunerationChair$29,000
Member$14,500
Safety, Health, Environment & SustainabilityChair$29,000
Member$14,500
(1) FY26 fees were paid effective from 1 July 2025.
(2) No additional fees are paid to the Board Chair for committee roles.
(3) Deputy Chair fees introduced and effective from 15 December 2025.
In addition to the above, overseas based directors are entitled to an annual travelling allowance of $18,000 in recognition of the
additional time spent travelling to and from New Zealand for Company-related matters.
Any fees paid to directors for unscheduled additional work are time-based and payable at the rate of $1,200 per half day. The
aggregate amount of such fees is limited to $70,000 in the year and any one director is limited to receiving no more than $14,500
in the year. Directors do not receive any further remuneration for also being directors of Fletcher Building Industries Limited, the NZX-
listed issuer of the Group’s capital notes. Directors’ fees exclude GST, where appropriate. Board members are entitled to be reimbursed
for costs directly associated with carrying out their duties, including travel costs.
69
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
DIRECTORS’ REMUNERATION
Details of the total remuneration received by each director during the financial year ended 30 June 2026 are as follows:
DirectorP Crowley
(1)
C QuinnS DoddsT DragicevichA Reding
(2)
J CoombesJ Miller
(3)
Total
Board Fees$320,000*$155,500$155,500$155,500$155,500$179,875$1,121,875
Audit & Risk Committee$19,500$38,000*$19,500$77,000
Disclosure Committee$20,000*$10,000$10,000$40,000
Nominations Committee$8,500$8,500$17,000
People & Remuneration Committee$14,500$29,000*$7,854$51,354
Safety, Health, Environment &
Sustainability Committee
$29,000*$14,500$14,500$58,000
Ad hoc Committee
(4)
$13,292$13,292$26,584
Overseas based directors' travelling
allowance
$18,000$18,000$18,000$54,000
Total Remuneration$338,000$237,292$249,292$202,500$-$193,000$225,729$1,445,813
* Chair of Committee
(1) Attended Committee meetings in an ex officio capacity.
(2) Managing Director and Group CEO, no Director fees payable.
(3) Director, appointed Deputy Chair effective 15 December 2025; appointed People & Remuneration Committee member effective 15 December 2025.
(4) Ad hoc committees include those established for the construction contracts review process.
MANAGING DIRECTOR’S AND GROUP CEO’S REMUNERATION
The remuneration Andrew Reding received for FY25 and FY26 is set out below.
For completeness, Andrew has not received any additional Board fees for his role as Managing Director since commencing
as Group CEO.
FY26FY25
(1)
Base remuneration$1,450,005
(2)
$1,093,255
Other benefits
(3)
$6,392$1,720
Total fixed remuneration$1,456,397$1,094,975
Short-term incentive paid in the financial year
(4)
--
Long-term incentive vested in the financial year
(5)
--
Total remuneration received
(6)
$1,456,397$1,094,975
Long-term incentives
Granted but only awarded after 3 years, if performance criteria are met
Long-term incentive – number of shares granted422,532
(7)
447,607
(8)
Long-term incentive – face value of grant$2,175,000$2,175,000
Refer to the Remuneration Report for details of the Short- and Long-Term incentives.
(1) Andrew Reding was appointed as the Managing Director and Group CEO on 30 September 2024. The FY25 year therefore reflects the period of 30 September 2024
to 30 June 2025.
(2) The Managing Director and Group CEO’s received base remuneration was $5 higher than his contracted base salary ($1,450,000) due to the payment of annual leave taken
within his first 12 months of employment, as required by Holidays Act 2003 averaging methodology.
(3) Other benefits include medical insurance. The value for FY25 reflects that medical insurance was only taken up part way through the year, while the FY26 value reflects
a premium change effective August 2025.
(4) No short-term incentive was paid during FY25 or FY26. The amount of any short-term incentive accrued during FY26, for payment in FY27, will be set out in the Remuneration
Report referred to below.
(5) As the Managing Director and Group CEO only started in FY25, he was not eligible for any LTI vesting.
(6) This table sets out remuneration awarded for the relevant financial year.
(7) Based on a share price of NZ$3.14 being the volume weighted average price for the thirty business days prior to 1 July 2025. The number of shares granted under the LTI
is calculated after deducting income tax for the relevant financial year.
(8) Based on a share price of NZ$2.96 being the volume weighted average price for the five business days prior to 1 September 2024. The number of shares granted under the
LTI is calculated after deducting income tax for the relevant financial year.
Further details of the remuneration arrangements of the Managing Director and Group CEO will be set out in the Remuneration Report
that will be made available to shareholders on the Company’s website in connection with the Company’s 2026 Notice of Annual
Shareholders’ Meeting.
70
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
DISCLOSURE OF INTERESTS BY DIRECTORS
The following are particulars of entries made by directors in the Company’s interests register during the 12 months ended 30 June
2026, pursuant to section 140(2) of the Companies Act 1993. The director will be regarded as interested in all transactions between
Fletcher Building and the disclosed entity. Changes to entries disclosed during the year to 30 June 2026 are noted in brackets, for
the purposes of section 211(1)(e) of the Companies Act 1993.
Peter CrowleyFletcher Building Industries LimitedChair
Riverside Marine Holdings Pty Limited (resigned effective 31 March 2026)Director
Cathy QuinnTourism Holdings LimitedChair
Fletcher Building Industries LimitedDirector
Fonterra Co-operative Group LimitedDirector
Rangatira LimitedDirector
Pin Twenty LimitedDirector/Shareholder
MinterEllisonRuddWattsConsultant
Council of the University of AucklandMember
Council of the University of Auckland (resigned effective 1 April 2026)Pro-Chancellor
Fertility Associates Holdings Limited (resigned effective 29 April 2026)Chair
Sandra DoddsContact Energy LimitedDirector
Fletcher Building Industries LimitedDirector
OceanaGold CorporationDirector
Snowy Hydro Limited (resigned effective 31 March 2026)Director
Tony DragicevichCapral LimitedManaging Director & CEO
Fletcher Building Industries LimitedDirector
Andrew RedingFletcher Building Industries LimitedDirector
AR Sharetrading LimitedDirector/Shareholder
Avertana Limited Shareholder
Hydroxsys Holdings LimitedShareholder
Tectonus LimitedDirector/Option holder
Jacqui CoombesFletcher Building Industries LimitedDirector
Guzman y Gomez LimitedDirector
James MillerChannel Infrastructure LimitedChair
Fletcher Building Industries Limited (Director, appointed Deputy Chair effective
15 December 2025)
Deputy Chair
Ryman Healthcare LimitedDirector
Vista Group International LimitedDirector
Mercury NZ Limited (retired effective 19 September 2025)Director
There were no specific disclosures made by any directors during the year of any interests in transactions entered into by them with
Fletcher Building or any of its subsidiaries.
INFORMATION USED BY DIRECTORS
There were no notices from directors of the Company requesting to disclose or use Company information received in their capacity
as directors.
INDEMNITY AND INSURANCE
In accordance with section 162 of the Companies Act 1993 and the constitution of the Company, Fletcher Building has continued
to indemnify and insure its directors, executives and employees acting on behalf of the Company against potential liability or
costs incurred in any proceeding, except to the extent prohibited by law. The insurance does not cover liabilities arising from
criminal actions.
71
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
DIRECTORS’ HOLDING OF SECURITIES
The policy of the Board is that non-executive directors (or their associated persons) are required to hold a beneficial interest in at
least 40,000 ordinary shares of the Company or ordinary shares with an aggregate value on purchase equivalent to a director’s base
fee at the time of joining the Board, to demonstrate their commitment to and alignment with the Company. Directors have three years
from their date of appointment to accumulate that holding. Non-executive directors do not participate in any Company share or
option plan.
DISCLOSURE OF DIRECTORS’ INTERESTS IN SECURITIES
Set out below is a table of the securities of the Company and Fletcher Building Industries Limited (a wholly-owned subsidiary of the
Company) in which each director had a relevant interest at 30 June 2026.
DirectorOwnershipOrdinary SharesCapital Notes
Peter CrowleyBeneficial72,270
Cathy Quinn
Beneficial57,816
Non-Beneficial
(1)
175,1818,024,500
Sandra DoddsBeneficial31,680
Tony DragicevichBeneficial70,000
Andrew Reding
Beneficial113,281
Beneficial interest in shares under the
Executive Long Term Share Scheme
870,139
Jacqui CoombesBeneficial16,314
James MillerBeneficial10,000
(1) Cathy Quinn holds a non-beneficial interest in Fletcher Building shares and Fletcher Building Industries Limited capital notes as a director/shareholder of Pin Twenty Limited.
DISCLOSURE OF DIRECTORS’ INTERESTS IN SHARE TRANSACTIONS
Directors disclosed, pursuant to section 148(2) of the Companies Act 1993, the following transactions involving relevant interests
in Fletcher Building shares and Fletcher Building Industries Limited capital notes during the year ended 30 June 2026.
DirectorDate of transactionNature of transaction
Nature of
relevant interestConsideration
Number of
securities
Jacqui Coombes25 August 2025Acquisition of ordinary sharesBeneficial interest$49,43316,314
James Miller25 August 2025Acquisition of ordinary sharesBeneficial interest$30,20010,000
Andrew Reding24 February 2026
Award of LTI interest in
ordinary shares
Beneficial interest under executive
LTI scheme
-422,532
Cathy Quinn26 February 2026
Transfer of capital notes
to a new registered holder
Non-beneficial interest
(1)
-8,024,500
Cathy Quinn16 March 2026
Redemption of capital notes
on maturity
Non-beneficial interest
(1)
$7,945,000
plus accrued
interest
7,945,000
Peter Crowley20 April 2026
Transfer of ordinary shares
to a new registered holder
Beneficial interestN/A72,270
(1) As a director/shareholder of Pin Twenty Limited, Cathy Quinn disclosed (a) a non-beneficial interest in the transfer of Fletcher Building Industries Limited capital notes to FNZ
Custodians Limited on 26 February 2026; and (b) a non-beneficial interest in Pin Twenty Limited’s 7,945,000 Fletcher Building Industries Limited capital notes redeemed on
16 March 2026.
72
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
4. OTHER DISCLOSURES
GENDER COMPOSITION
Set out in the table below is a quantitative breakdown as at 30 June 2026, and as at 30 June 2025, of the number of directors and
officers who self-identify as male, female and gender diverse.
20262025
(1)
FemaleMale
Gender
DiverseFemaleMale
Gender
Diverse
Board of Directors
(2)
3 (43%)4 (57%)0 (0%)3 (43%)4 (57%)0 (0%)
Executive Committee
(2)
2 (22%)7 (78%)0 (0%)2 (22%)7 (78%)0 (0%)
Senior Management
(3)
19 (33%)38 (67%)0 (0%)18 (32%)38 (68%)0 (0%)
All employees
(4)
26%72%0%26%72%0%
(1) FY25 gender composition figures have been restated to exclude the Construction Division which was divested in FY26, enabling a like-for-like comparison with FY26 results.
(2) Andrew Reding (Managing Director and Group CEO) has been counted in both the Board of Directors and Executive Committee data. The Executive Committee, for these
purposes, comprises those persons who report directly to the Managing Director and Group CEO. The members of the Executive Committee are ‘Officers’ for the purposes
of NZX Listing Rule 3.8.1(c).
(3) Senior Management for these purposes includes any leader who reports to a member of the Executive Committee.
(4) Based on employees who disclose gender information.
DIVERSITY AND INCLUSION
The Board is satisfied with the initiatives being implemented by the Group and its performance with respect to the Inclusion and
Diversity Policy.
AUDITOR’S FEES
EY has continued to act as auditors of the Group. Details of the fees and expenses paid to EY are provided in note 5 of the
consolidated financial statements within this Annual Report. Any additional work performed by EY beyond the statutory audit was
pre-approved in accordance with the Auditor Independence Policy, available on the Company's website.
CREDIT RATING
As at 30 June 2026, the Group does not hold an external credit rating. The Group’s previous credit rating from Moody’s Investors
Service was withdrawn on 25 June 2026 at the Group’s request.
DONATIONS
Please refer to note 5 of the audited consolidated financial statements for donations made in FY26. All political donations must
be approved by the Board.
73
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
EMPLOYEE REMUNERATION
Section 211(1)(g) of the Companies Act 1993 requires disclosure of the number of employees or former employees of the Group
whose remuneration and any other benefits received during the year in their capacity as employees, was equal to or exceeded
$100,000 per annum and to state the number of such employees or former employees in brackets of $10,000. These amounts are
included below and include all applicable employees or former employees of Fletcher Building worldwide. The remuneration amounts
include all monetary amounts and benefits actually paid during the year, including redundancies and the face value of long-term
incentives vested.
From NZD to NZD
New Zealand
business
activities
International
business
activitiesTotalFrom NZD to NZD
New Zealand
business
activities
International
business
activitiesTotal
100,000 – 110,000665215880420,000 – 430,000202
110,000 – 120,000521227748430,000 – 440,000426
120,000 – 130,000445245690440,000 – 450,000213
130,000 – 140,000342190532450,000 – 460,000213
140,000 – 150,000230168398460,000 – 470,000101
150,000 – 160,000172140312470,000 – 480,000112
160,000 – 170,000141119260480,000 – 490,000257
170,000 – 180,00096118214490,000 – 500,000022
180,000 – 190,0009296188500,000 – 510,000224
190,000 – 200,0006990159510,000 – 520,000123
200,000 – 210,0005060110520,000 – 530,000101
210,000 – 220,0005159110530,000 – 540,000022
220,000 – 230,000323870540,000 – 550,000202
230,000 – 240,000363369610,000 – 620,000112
240,000 – 250,000152641630,000 – 640,000112
250,000 – 260,000222648640,000 – 650,000101
260,000 – 270,000181735690,000 – 700,000202
270,000 – 280,00014822720,000 – 730,000011
280,000 – 290,000121325750,000 – 760,000101
290,000 – 300,000121123770,000 – 780,000101
300,000 – 310,00071017780,000 – 790,000101
310,000 – 320,0009615820,000 – 830,000011
320,000 – 330,0004610830,000 – 840,000101
330,000 – 340,0008412930,000 – 940,000101
340,000 – 350,0008210980,000 – 990,000101
350,000 – 360,00086141,000,000 – 1,010,000101
360,000 – 370,0003691,030,000 – 1,040,000101
370,000 – 380,0006281,100,000 – 1,110,000011
380,000 – 390,0005271,380,000 – 1,390,000101
390,000 – 400,0002241,450,000 – 1,460,000101
400,000 – 410,0003141,700,000 – 1,710,000101
410,000 – 420,0003032,190,000 – 2,200,000101
Total3,1381,9695,107
The FY26 highest-paid employee population includes two leaders in the Construction Division (now divested) who received one-off
project completion incentives related to the New Zealand International Convention Centre (NZICC). These incentives were established
to retain key leaders over a six-year period to deliver NZICC through recovery, remediation and completion. The leaders successfully
led the project to practical completion and handover, achieving a critical milestone for Fletcher Building.
The number of individuals above $1 million in FY26 is 7 (compared to 17 in FY23, 9 in FY24 and 13 in FY25).
This table is required by law and sets out remuneration that has been received during this year and so includes amounts that relate
to prior periods (due to timing of payments).
74
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
STOCK EXCHANGE LISTINGS
Fletcher Building’s ordinary shares are listed and quoted on the Main Board of NZX Limited and the Australian Securities Exchange
(ASX) under the company code ‘FBU’. Fletcher Building’s listing on the ASX is as a Foreign Exempt Listing. Fletcher Building must
comply with the NZX Listing Rules but is exempt from almost all of the ASX Listing Rules. For the purposes of ASX Listing Rule 1.15.3,
Fletcher Building confirms that it continues to comply with the NZX Listing Rules.
EXERCISE OF NZX/ASX DISCIPLINARY POWERS
Neither NZX nor ASX has taken any disciplinary action against Fletcher Building during the financial year ended 30 June 2026 and
there was no exercise of powers by NZX under NZX Listing Rule 9.9.3 (relating to powers to cancel, suspend or censure an issuer)
with respect to Fletcher Building during the reporting period.
NZX WAIVERS
There were no waivers granted by NZX or relied on by Fletcher Building in the 12 months ended 30 June 2026.
DISTRIBUTION OF SHAREHOLDERS AND HOLDINGS
The total number of voting securities of Fletcher Building at 30 June 2026 was 1,075,561,767 fully paid ordinary shares, each conferring
on the registered holder the right to one vote on a poll at a meeting of shareholders.
Size of holdingNumber of shareholders% of shareholdersNumber of ordinary shares% of ordinary shares
1 – 1,00013,69648.195,536,9380.51
1,001 – 5,0009,78334.4223,767,6582.21
5,001 – 10,0002,4578.6417,599,3191.64
10,001 – 100,0002,3248.1856,821,4125.28
100,001 Over1610.57971,836,44090.36
Total
28,421100.001,075,561,767100.00
SUBSTANTIAL PRODUCT HOLDERS
According to notices given under the Financial Markets Conduct Act 2013, the following persons were substantial product holders
of Fletcher Building as at 30 June 2026. The total number of voting securities of Fletcher Building Limited at 30 June 2026 was
1,075,561,767 fully paid ordinary shares.
Substantial product holder
Number of ordinary shares in
which relevant interest is heldDate of notice
Allan Gray Australia Pty Ltd
and its related bodies corporate
212,288,5012 April 2026
Schroders Investment Management Australia Limited
and its related bodies corporate
65,903,47226 May 2025
75
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
20 LARGEST REGISTERED HOLDERS AS AT 30 JUNE 2026
Holder NameNumber of ordinary shares% of issued capital
CITICORP NOMINEES PTY LIMITED152,950,25614.22
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED133,799,27912.44
JP MORGAN NOMINEES AUSTRALIA LIMITED131,131,62312.19
BNP PARIBAS NOMINEES (NZ) LIMITED - NZCSD89,049,6808.28
CITIBANK NOMINEES (NEW ZEALAND) LIMITED - NZCSD64,174,3805.97
JPMORGAN CHASE BANK NA NZ BRANCH - NZCSD40,246,3363.74
HSBC NOMINEES (NEW ZEALAND) LIMITED - NZCSD39,191,2913.64
HSBC NOMINEES (NEW ZEALAND) LIMITED A/C STATE STREET - NZCSD37,871,3493.52
BNP PARIBAS NOMINEES PTY LTD36,293,3183.37
HSBC NOMINEES A/C NZ SUPERANNUATION FUND NOMINEES LIMITED - NZCSD25,640,7322.38
ACCIDENT COMPENSATION CORPORATION - NZCSD19,815,2711.84
NEW ZEALAND DEPOSITORY NOMINEE LIMITED 17,698,2331.65
APEX CUSTODIAN NOMINEES (NZ) LIMITED - NZCSD 15,390,0241.43
JBWERE (NZ) NOMINEES LIMITED15,227,0801.42
GENERATE KIWISAVER PUBLIC TRUST NOMINEES LIMITED - NZCSD14,602,0711.36
SIMPLICITY NOMINEES LIMITED - NZCSD14,373,7841.34
JBWERE (NZ) NOMINEES LIMITED10,579,1640.98
PT (BOOSTER INVESTMENTS) NOMINEES LIMITED9,993,9490.93
CUSTODIAL SERVICES LIMITED7,590,7840.71
BNP PARIBAS NOMS PTY LTD7,174,2760.67
Total882,792,88082.08
New Zealand Central Securities Depository Limited (NZCSD) provides a custodial depository service which allows electronic trading
of securities to members. It does not have a beneficial interest in these securities. As at 30 June 2026, the total number of ordinary
shares held in NZCSD was 373,106,344 which amounted to 34.69% of the ordinary shares on issue.
76
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
SUBSIDIARY COMPANY INFORMATION
The persons listed below respectively held office as directors of Fletcher Building Limited or one or more of its subsidiary companies
as at 30 June 2026, or in the case of those persons with the letter (R) after their name ceased to hold office during the year. Except
where shown below, Fletcher Building’s indirect ownership interest in these companies as at 30 June 2026 was 100%.
No employee of Fletcher Building appointed as a director of a Fletcher Building company retains any remuneration or other benefits,
as a director. The remuneration and other benefits of such employees, received as employees, are included in the relevant bandings
for remuneration disclosed in the “Employee Remuneration” section. Except where shown below, no other director of any subsidiary
company within the Group receives director’s fees or other benefits as a director.
CompanyDirectors
Amatek Holdings Pty LimitedA King, W Wright, F Hopkins (R)
Amatek Industries Pty LimitedA King, W Wright, F Hopkins (R)
Amatek Investments Pty LimitedA King, W Wright, F Hopkins (R)
Baron Insulation Pty LtdH McBeath, A Rowe, W Wright (R)
Belvedere FRL No 1 General Partner Limited (51%)S Evans, P Majurey
Belvedere FRL No 1 Limited Partnership (51%)
Belvedere FRL No 2 General Partner Limited (51%)S Evans, P Majurey
Belvedere FRL No 2 Limited Partnership (51%)
Building Prefabrication Solutions LimitedJ Peters, W Wright
Burnham 2020 LimitedT Williams, W Wright
Cleaver Building Supplies Limited (75%)M Cleaver, J Peters
Crane Enfield Metals Pty LimitedC Gatt, W Wright, F Hopkins (R)
Crane Group Pty LimitedC Gatt, W Wright, F Hopkins (R)
Crevet Pipelines Pty LtdC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Crevet Pty LtdC Gatt, H McBeath, F Hopkins (R) W Wright (R)
CTCI Pty LimitedP Lavelle, H McBeath, S Leagh-Murray (R), W Wright (R)
Delcon Holdings (No. 11) LimitedT Williams, W Wright
ee-Fit Pty LimitedH McBeath, A Rowe, W Wright (R)
FBHS (Aust) Pty LimitedA King, T Williams, F Hopkins (R), W Wright (R)
FBSOL Pty LimitedA King, T Williams, F Hopkins (R), W Wright (R)
Fletcher Building (Australia) Pty LtdP Lavelle, W Wright, F Hopkins (R)
Fletcher Building Educational Fund LimitedK Eagle, J McDonald, R Rendle
Fletcher Building Holdings LimitedH Wong, W Wright
Fletcher Building Holdings New Zealand LimitedH Wong, W Wright
Fletcher Building Industries LimitedJ Coombes, P Crowley, S Dodds, A Dragicevich, J Miller, C Quinn,
A Reding
Fletcher Building LimitedJ Coombes, P Crowley, S Dodds, A Dragicevich, J Miller, C Quinn,
A Reding
Fletcher Building Nominees LimitedM Binns, J Chapman, H McKenzie, C Munkowits, G Niccol, T Williams
Fletcher Building Products Australia Pty LtdP Lavelle, W Wright, F Hopkins (R)
Fletcher Building Products LimitedH McBeath, W Wright
Fletcher Building Share Schemes LimitedJ Chapman, G Niccol
Fletcher Building Welfare Fund Nominees LimitedD Lucas, S Schulz, D Sixton, C Stewart
Fletcher Challenge Building UK LimitedH Wong, W Wright, S Evans (R)
Fletcher Challenge Forest Industries LimitedH Wong, W Wright, S Evans (R)
Fletcher Concrete and Infrastructure LimitedT Williams, W Wright, H McBeath (R)
Fletcher Construction (Solomon Islands) LimitedA Brown, W Wright, P Boylen (R), A Henderson (R), A Scoggins (R)
Fletcher Construction Company (Fiji) Pte LimitedA Kumar, W Wright, P Boylen (R)
Fletcher Development LimitedS Evans, W Wright
Fletcher Distribution LimitedJ Peters, W Wright
Fletcher Industries Australia Pty LimitedP Lavelle, W Wright, F Hopkins (R)
77
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
CompanyDirectors
Fletcher Insulation Pty LimitedH McBeath, A Rowe, W Wright (R)
Fletcher Morobe Construction LimitedA Brown, R Simpson, P Boylen (R)
Fletcher Pacific (Samoa) LtdA Brown, W Wright, P Boylen (R), A Henderson (R)
Fletcher Property LimitedH Wong, W Wright
Fletcher Residential LimitedS Evans, W Wright
Fletcher Steel LimitedT Williams, W Wright, H McBeath (R)
Fletcher Wood Products LimitedH McBeath, W Wright
Gatic Pty LimitedC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Geraldton Independent Building Supplies Pty LimitedP Lavelle, H McBeath, S Leagh-Murray (R), W Wright (R)
Homai MFR General Partner Limited (51%)S Evans, P Majurey
Homai MFR Limited Partnership (51%)
HotForm Products Limited (51%)C Lee, J Mainwaring, R Sutherland, D Sutton
Iplex Pipelines Australia Pty LimitedC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Iplex Pipelines NZ LimitedH McBeath, W Wright
Iplex Properties Pty. LimitedC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Kaipatiki FRL General Partner Limited (51%)S Evans, P Majurey
Kaipatiki FRL Limited Partnership (51%)
Key Plastics Pty. Ltd.C Gatt, H McBeath, P Lavelle (R), W Wright (R)
Kingston Bridge Engineering Pty LtdC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Kinsey Kydd Building Supplies LimitedW Wright
Kusabs Building Supplies Limited (75%)J Peters, G Kusabs
Laminex Group Pty LimitedP Lavelle, H McBeath, S Leagh-Murray (R), W Wright (R)
Leary Building Supplies Limited (75%)B Leary, J Peters
Macready Building Supplies Limited (75%)J Peters, J Macready (R)
Matt Orr Building Supplies Limited (75%)M Orr, J Peters
McGill Building Supplies Limited (75%)J McGill, J Peters
McInnes Building Supplies LimitedW Wright
Mico New Zealand LimitedJ Peters, W Wright
Milnes Holdings Pty LimitedC Gatt, H McBeath, F Hopkins (R), W Wright (R)
Moire Road General Partner Limited (51%)N Donnelly, S Evans
Moire Road Limited Partnership (51%)
Morinda Australia Pty LimitedA King, T Williams, F Hopkins (R), W Wright (R)
Northern Iron and Brass Foundry Pty. Ltd.G Gatt, H McBeath, P Lavelle (R), W Wright (R)
Ōkahukura GP Limited (51%)D Clay, S Evans
Ōkahukura Limited Partnership (51%)
Oliveri Solutions Pty LimitedH McBeath, J Woodcock, F Hopkins (R), W Wright (R)
Paul Robinson Building Supplies Limited (75%)J Peters, P Robinson
PlaceMakers Co 1 LimitedJ Peters, W Wright
PlaceMakers Co 2 LimitedJ Peters, W Wright
PlaceMakers Co 3 LimitedJ Peters, W Wright
PlaceMakers Co 4 LimitedJ Peters, W Wright
PlaceMakers Co 5 LimitedJ Peters, W Wright
PlaceMakers Co 6 LimitedJ Peters, W Wright
PlaceMakers Gisborne Limited (75.28%)J Peters, W Wright
PlaceMakers Hawkes Bay Limited (94.06%)J Peters, W Wright
PlaceMakers Invercargill LimitedJ Peters, W Wright
PlaceMakers LimitedJ Peters, W Wright
PlaceMakers Southland LimitedJ Peters
78
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
CompanyDirectors
PlaceMakers Supply, Fix & Install LimitedJ Peters, W Wright
PlaceMakers Waiheke Limited (75%)D Banks, J Peters
PlaceMakers Wanaka Limited (80%)J Peters, B Stanley-Joblin
Polymer Fusion Education Pty LtdC Gatt, H McBeath, P Lavelle (R), W Wright (R)
Raylight Aluminium Limited (80%)C Mearns, J Peters
Reece Building Supplies Limited (75%)J Peters, J Reece
Renewable Wood Fuels LimitedH McBeath, W Wright
S Cubed Pty LimitedA King, T Williams, F Hopkins (R), W Wright (R)
Selwyn Quarries LimitedT Williams, W Wright
Shed Boss NZ LimitedT Williams, W Wright
Sonata Acoustic Panels Pty LimitedH McBeath, A Rowe, W Wright (R)
Stanley Building Supplies LimitedJ Peters, W Wright
Stramit Corporation Pty LimitedA King, T Williams, F Hopkins (R), W Wright (R)
Tasman Australia Pty LimitedH McBeath, A Rowe, F Hopkins (R), W Wright (R)
Tasman Building Products Pty LimitedH McBeath, A Rowe, F Hopkins (R), W Wright (R)
Tasman Insulation New Zealand LimitedH McBeath, W Wright
Tauoma FRL GP Limited (51%)S Evans, P Majurey
Tauoma FRL Limited Partnership (51%)
TBP Group Pty LimitedH McBeath, A Rowe, F Hopkins (R), W Wright (R)
Te Tau Waka General Partner Limited (51%)D Clay, S Evans
Te Tau Waka Limited Partnership (51%)
Terrace Insurances (PCC) LimitedK Burke, J Crowder, M Rogers
The Fletcher Construction Company (Fanshawe Street)
Limited
H Wong, W Wright, P Boylen (R)
The Fletcher Construction Company LimitedH Wong, W Wright, P Boylen (R)
The Fletcher Organisation (Vanuatu) LimitedA Brown, J Huteau, P Boylen (R), A Care (R)
The Fletcher Trust and Investment Company LimitedT Williams, W Wright, P Boylen (R)
Vivid Living LimitedH Wong, W Wright, S Evans (R)
Waipapa Pine LimitedH McBeath, W Wright
Water Filters Australia Pty LimitedH McBeath, J Woodcock, W Wright (R)
Wednesday Pte LimitedA Kumar, T Williams, P Boylen (R)
Winstone Wallboards LimitedH McBeath, D Thomas, W Wright
79
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
As at 30 June 2026, Fletcher Building held an indirect ownership interest in the following associates and joint ventures.
CompanyOwnership
Altera Apartments General Partner Limited50%
Altera Apartments Limited Partnership50%
Altus NZ Limited50%
Bellus Apartments General Partner Limited50%
Bellus Apartments Limited Partnership50%
Greenraft Limited33.33%
Hexion Australia Pty Ltd50%
Ilico Apartments General Partner Limited50%
Ilico Apartments Limited Partnership50%
Interpipe Holdings Limited50%
JFC Pumps Limited50%
Oamaru Shingle Supplies Limited33.33%
Rangitikei Aggregates Limited50%
Rodney Aggregates Supplies Limited50%
Roys Hill Aggregates Limited50%
Verto Apartments General Partner Limited50%
Verto Apartments Limited Partnership50%
Wespine Industries Pty Ltd50%
80
Mandatory Disclosures (Continued)
CONTENTS
Fletcher Building Limited Annual Report 2026
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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