Our Year in Review Strategy
Our Leadership
Divisions
Business Sustainability
Financials and Governance
BACK HOME
Steel
Building Products
Distribution
Concrete
Residential and Development
Construction Australia
Formica and Roof Tile Group
Divisions
Gross Revenue $532m 2017 $491m ▲ 8% EBIT before significant items $49m 2017 $54m ▼ 9% EBIT % 9% 2017 11% ▼ 2ppts
Steel
750+ 6
The division also maintained its focus on customer satisfaction, with Easysteel launching a new customer service promise that includes a commitment to steel-origin traceability – a first-of-its- kind initiative in New Zealand, which will enhance competitiveness in light of recent challenges within the broader industry regarding imported steel quality. FUTURE FOCUS The division will remain focussed on improving the efficiency of its site footprint, to reduce overheads as a percentage of sales and support future earnings growth. Following the successful integration of Calder Stewart Roofing into Dimond, and the rebranding of the combined business to Dimond Roofing, the division will continue to focus on growing its roofing revenue, while embedding customer service promises across all businesses, to support higher levels of customer engagement.
DIVISIONAL PERFORMANCE OVERVIEW The Steel division reported gross revenue of $532 million, an increase of 8% from FY17, as it benefited from strong demand within the construction and infrastructure markets. Easysteel achieved revenue growth of 15%, due to the full-year impact of the acquisition of the Calder Stewart Roofing business and a 3% increase in core structural steel volumes. Pacific Coilcoaters and Fletcher Reinforcing maintained stable revenues, with plants operating at high capacity levels to meet strong demand. Operating earnings before significant items were down 9% to $49 million, primarily driven by global steel prices and margin contraction in Fletcher Reinforcing. Steel prices have continued an upward trend year-on-year and are 220% up from the most recent low in 2016 of US$280 per tonne. In addition, during the year $8 million of significant items were incurred including $7 million relating to the integration of the Calder Stewart Roofing business into the division, site consolidations and co-locations across the country. During the year the division invested $14 million in its distribution and manufacturing operations and systems to improve cost-efficiencies and enable future growth. This included new state-of-the-art facilities in Dunedin, that brings Fletcher Reinforcing, Easysteel and Dimond under one roof, and a new Enterprise Resource Planning (ERP) system for Fletcher Reinforcing, which went live in the last quarter of the financial year and delivered immediate improvements in inventory, operating efficiencies and pricing.
Under the umbrella of Fletcher Steel, the Steel division operates through six brands, with more than 750 people working across operations that span New Zealand. • Easysteel is a steel products distributor and provider of related services. • Pacific Coilcoaters operates a paint line that distributes pre-painted steel and aluminium for roofing and cladding. It sells products through the ColorCote® brand. • Dimond Roofing and Dimond Structural are roofing, cladding, structural and rainwater specialists. • Fletcher Reinforcing supplies
the construction sector with reinforcing-related products and also manages the onsite installation of reinforcing.
• Fletcher Wire Products provides fencing wire and finished fencing products (Cyclone Wire, NZ Wire and Eclipse) to rural merchants.
Our focus is on delivering superior quality project and service innovation so we remain the preferred choice for our customers.
Dimond Structural
Hamish Mcbeath Chief Executive Steel
26 Fletcher Building Limited Annual Report 2018
Made with FlippingBook - professional solution for displaying marketing and sales documents online