New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Fletcher Building’s (FBU) 1Q27 volumes highlighted that activity has remained robust thus far in FY27.</li><li>Residential home sales were the lowlight, and FBU expects a minimal 1H27 earnings contribution.</li><li>We have adjusted our forecasts to reflect lower residential sales partly offset by better near-term materials volumes.</li></ul>

Fletcher Building’s (FBU) 1Q27 volumes highlighted that activity has remained robust thus far in FY27.Residential home sales were the lowlight, and FBU expects a minimal 1H27 earnings contribution.We have adjusted our forecasts to reflect lower residential sales partly offset by better near-term materials volumes.

Fletcher Building 1Q27 Volumes—Building Through the Noise

<ul><li>Fletcher Building's (FBU) FY26 result was slightly better than expectations for earnings and net debt.</li><li>Despite recent volatility, FBU's core materials and distribution divisions delivered strong earnings growth, aided by cost-out and higher volumes.</li><li>FBU continues to tick the boxes on its strategic transformation, with margins and ROIC lifting off lows but still below long-term targets.</li></ul>

Fletcher Building's (FBU) FY26 result was slightly better than expectations for earnings and net debt.Despite recent volatility, FBU's core materials and distribution divisions delivered strong earnings growth, aided by cost-out and higher volumes.FBU continues to tick the boxes on its strategic transformation, with margins and ROIC lifting off lows but still below long-term targets.

Fletcher Building FY26 Result—Putting Up the Framing

<ul><li>Fletcher Building (FBU) reported FY26 EBIT (continuing operations before significant items) of NZ$414m, up +26% on the prior year, slightly ahead of our expectations and recent guidance.</li><li>Light Building Products was particularly strong with FY26 EBIT +22% (2H26 EBIT +44% yoy) and ROIC +130bps with volume growth across all products.</li><li>There was no quantitative FY27 guidance provided but with current Visible Alpha consensus for continuing operations EBIT of NZ$396m and strong 2H26 exit run rates we suspect risk to market forecasts is to the upside.</li></ul>

Fletcher Building (FBU) reported FY26 EBIT (continuing operations before significant items) of NZ$414m, up +26% on the prior year, slightly ahead of our expectations and recent guidance.Light Building Products was particularly strong with FY26 EBIT +22% (2H26 EBIT +44% yoy) and ROIC +130bps with volume growth across all products.There was no quantitative FY27 guidance provided but with current Visible Alpha consensus for continuing operations EBIT of NZ$396m and strong 2H26 exit run rates we suspect risk to market forecasts is to the upside.

<ul><li>It’s been a year since Fletcher Building (FBU) outlined its strategic reset.</li><li>From here we believe FBU needs to present a clearer picture on what level it believes the strategic reset can lift return on invested capital to.</li><li>Our benchmarking to ANZ competitors suggests a ROIC of 10%–12% should be achievable through the cycle with a mixture of better operating discipline and capital efficiency.</li></ul>

It’s been a year since Fletcher Building (FBU) outlined its strategic reset.From here we believe FBU needs to present a clearer picture on what level it believes the strategic reset can lift return on invested capital to.Our benchmarking to ANZ competitors suggests a ROIC of 10%–12% should be achievable through the cycle with a mixture of better operating discipline and capital efficiency.

Fletcher Building The Master Plan Needs Some Final Details

Thematic (Sector/Industry)

<ul><li>Despite current macro volatility, residential consent volumes remained robust in August, and non-residential consent volumes continued to slowly pick up.</li><li>The pick-up in consents is translating to volumes on typical lags, and we will get more updates from the listed companies over the coming months: Fletcher Building’s (FBU) 1Q27 volume update and AGM trading updates from FBU, Vulcan (VSL), and Steel & Tube (STU).</li><li>We expect these updates to highlight a pick-up in activity on the prior year but flat activity relative to FY26 exit run rates.</li></ul>

Despite current macro volatility, residential consent volumes remained robust in August, and non-residential consent volumes continued to slowly pick up.The pick-up in consents is translating to volumes on typical lags, and we will get more updates from the listed companies over the coming months: Fletcher Building’s (FBU) 1Q27 volume update and AGM trading updates from FBU, Vulcan (VSL), and Steel & Tube (STU).We expect these updates to highlight a pick-up in activity on the prior year but flat activity relative to FY26 exit run rates.

Building Sector NZ Consents—Signed, Sealed, Delivered?

Australia

Fletcher Building Limited manufactures, distributes, and sells materials for the building industry including wood fiber-based products, cement and aggregates, plasterboard, laminates, lumber, and aluminium extrusion. The Company operates primarily in New Zealand and Australia.

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Fletcher Building (FBU AU)

Fletcher Building 1Q27 Volumes—Building Through the Noise

Fletcher Building’s (FBU) 1Q27 volumes highlighted that activity has remained robust thus far in FY27. Residential home sales were the lowlight,...

Forsyth Barr

Fletcher Building FY26 Result—Putting Up the Framing

Fletcher Building's (FBU) FY26 result was slightly better than expectations for earnings and net debt. Despite recent volatility, FBU's core...

Forsyth Barr

FBU: FY26 First Impressions

Fletcher Building (FBU) reported FY26 EBIT (continuing operations before significant items) of NZ$414m, up +26% on the prior year, slightly ahead...

Forsyth Barr

Fletcher Building The Master Plan Needs Some Final Details

It’s been a year since Fletcher Building (FBU) outlined its strategic reset. From here we believe FBU needs to present a clearer picture on what...

Forsyth Barr

Building Sector NZ Consents—Signed, Sealed, Delivered?

Despite current macro volatility, residential consent volumes remained robust in August, and non-residential consent volumes continued to slowly...

Forsyth Barr

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