Our Year in Review Strategy
Our Leadership
Divisions
Business Sustainability
Financials and Governance
BACK HOME
In safety, we will drive TRIFR 2 below five across all businesses and pivot our focus onto managing and removing serious and high-potential incidents from our day to day activities. We want to lead in sustainability and will look to embed sustainability measures and outcomes into our products and practices. We want our employees to remain engaged and we will aim to get all businesses performing in the top quartile. We continue to head in the right direction, with our FY18 people engagement score for the total business increasing to 70%. Finally, we will assess everything we do through a customer lens, ensuring our businesses embed transparent and measurable customer service promises that differentiate us from the competition and drive high levels of customer satisfaction. We believe the new Fletcher Building strategy is focussed, clear and uncomplicated and will ultimately better enable us to deliver more value for our shareholders.
Our continuous improvement activities will be moved closer to the businesses to improve accountability, drive manufacturing excellence, reduce procurement costs, enhance customer service and support a culture of innovation. Right across our portfolio we will be looking at how our business can respond to, and lead, global trends in our local markets. Some key trends currently influencing our industries are product innovation (particularly around the sustainability of our products), service and channel innovation (which speaks to how we serve our customers), labour productivity and the global shift to offsite manufacturing, and global supply chains, including lower-cost country sourcing for certain inputs. The strategy will be delivered over three broad stages. In FY19 the focus is on stabilising the go-forward businesses and exiting non-core businesses. Done well this should set us up for a solid FY20, with momentum building so that in FY21 and beyond we achieve above market growth. With clear strategic focus areas in place, and a new operating model to support our aspirations, we are in a stronger position to grow in the coming years. But no business can grow without strong foundations in safety, people engagement, sustainability and customer engagement – and we will remain focussed on growing our performance across these fundamentals.
Our new operating model was announced on 21 June and has been effective since 1 July 2018. It will reduce overheads across the Group by $30 million per annum, empower businesses at the frontline and the new divisional structure aligns businesses to our new strategy. This new structure includes seven divisions, each with its own chief executive who reports to our CEO Ross Taylor. This structure reflects a logical grouping of our businesses in New Zealand and establishes a new stand-alone division in Australia. The Australian division groups all our Australian businesses together for the first time, under one chief executive Dean Fradgley who will be based in the country. This will provide more focus, integration and capability sharing, better positioning us to achieve our turnarounds, identify and pursue cost-efficiencies and take advantage of customer and market opportunities. Formica and Roof Tile Group will continue to operate as a separate division, under the leadership of chief executive Francisco Irazusta, as the assets are prepared for divestment. In terms of innovation, we will have a dual focus on continuous improvement, which is in line with our Fletcher Building value of ‘better every day’, and taking advantage of global trends influencing our markets.
STAGE 1 | FY19 Turnaround / Exit
STAGE 2 | FY20 Solid Performance
STAGE 3 | FY21 – 23 Growth
Ongoing refinement of operating model and governance
Innovating to achieve continuous improvement and take advantage of key macro trends
New Zealand businesses strong and growing
NZ
Construction returned to profit
Construction turnaround complete
Australia turnaround underway
Performance improvement advancing strongly Profitable market share gains in Australia
AU
Formica and Roof Tile Group sold
$
Fill network gaps and enter new adjacencies with M+A 3
2 Total recordable injury frequency rate. Measured by the total number of recordable injuries per million hours worked.
3 Mergers and acquisitions.
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Fletcher Building Limited Annual Report 2018
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