Regional Meetings 2013Christchurch, Dunedin, Wellington, Auckland, Rotorua

Creating A Better World For Our Customers

Creating A Better World For Our Customers

Regional Meetings 2013

Agenda 8.30am On Arrival Coffee/Tea 9.00am Welcome &Network update Mark Gilbert

State of the Nations 9.30am Technical presentations begin Farrokh Wadia 10.15 Morning Tea 10.30am Technical presentations continue Farrokh Wadia 12.00pm Q & A Session Technical All 12.30pm Lunch 1.00pm NALCO Service Offer discussion All 2.00pm Nulook Vision Sales Initiatives & Marketing Update Mark Gilbert 3.00pm Afternoon Tea 3.15pm Specification Opportunities & Challenges Kurt van Neikerk 4.30pm General Business All 5.00pm Meeting Closes

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Staff Changes

• Kurt van Niekerk Commercial Manager• Tony Roberts RSM South Island• Kerry Wright RSM BOP, Waik, Taranaki &

Whanganui• Rob Henderson RSM Akl, Well,

Palmerston & HB

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Licensee Changes

• Nulook Motueka• Nulook Golden Bay • Kaikoura Glass• Aztec Aluminium• Franklin Aluminium• Twin City Aluminium• Nulook Enterprise

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Questions?

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ECONOMY - General• Unemployment rate at 6.9% (December 2 Quarter – it was 7.3% in Sept 12 quarter)

• Australia is 5.3%, NZ is around 10th best in OECD (34 countries)

• OCR rate unchanged at 2.5% (at this level since March 2011)

• Latest OCR announcement (“Should remain unchanged through to end of year”)• House price inflation – gone from “increasing” to “High”, “NZ dollar overvalued,”• Opposing forces - hiking UP the OCR pushes up dollar, further lowers inflation. Lowering DOWN the OCR or unchanged

forever further stokes up the housing market and runaway inflation in the longer term.• GDP at 2.5% for YE December 2012

• New Zealand immigration numbers – net gain of 2500 people for

March 2013 year. • 86,000 arrivals dominated by UK (6100), China (5400), India (4900), Philipines (1900), Germany (1700) • 83,500 departures, 35,500 of these were out to Australia compared t o 39,500 in March 2012 year

• March 2012 year saw a net loss of 3400 people• Quote from 2012 presentation “The population loss to Australia is on the cusp of

ending (Tony Alexander – BNZ)” – Looks like he might be right?

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HOUSING in NZ

• Days to sell (NZ average) – 31 days (Auck 29, Otago 29, Canterbury 24)

• House Sales Chart

• Consents follow house sales (Rodney Dickens)

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BUILDING STATISTICS

• Residential over the last six years.– 2008 = 25,235 consents with 2387 being apartments – 2009 = 16,710 consents with 2182 being apartments ( -34% )– 2010 = 14,971 consents with 1244 being apartments ( -10% )– 2011 = 15,025 consents with 1063 being apartments ( Eq )– 2012 = 14,124 consents with 1237 being apartments ( -6% ) – 2013 = 17,432 consents with 1689 being apartments (+24% )

• Non Residential over six years– 2008 = $4,351 million value of consents– 2009 = $4,587 million value of consents ( +5%)– 2010 = $4,321 million value of consents ( -6% )– 2011 = $3,718 million value of consents ( -14% )– 2012 = $3,763 million value of consents ( +1% )– 2013 = $3,798 million value of consents ( +1% )

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The last 12 months residential detail

Auckland 511 360 361 264 408 378 458 433 432 432 372 473 4,882Waikato 162 152 166 124 146 151 165 200 170 142 104 183 1,865Bay of Plenty 90 59 68 61 96 86 84 135 111 73 88 95 1,046Gisborne 4 15 20 4 10 7 1 3 5 15 2 11 97Hawkes Bay 31 62 32 42 34 31 27 38 50 24 26 20 417Taranaki 35 28 33 25 25 30 28 46 39 26 36 33 384Manawatu-Wanganui 58 41 47 35 41 43 42 107 47 48 31 36 576Wellington 136 79 75 148 115 105 119 79 104 115 92 81 1,248

North Island1,09

3 832 841 747 937 884 9721,09

51,01

0 933 806 977 11,127

Tasman 27 16 19 21 26 25 24 33 36 24 21 19 291Nelson 28 10 35 29 25 21 21 22 21 18 23 31 284Marlborough 12 14 11 26 13 14 12 17 18 12 7 21 177West Coast(4) 17 10 12 16 26 17 9 16 9 5 6 14 157Canterbury 281 282 351 296 371 394 396 333 413 281 378 351 4,127Otago 79 53 82 124 67 92 62 107 124 79 63 67 999Southland(5) 22 13 21 18 13 66 24 16 27 28 8 13 269South Island(4,5) 466 398 531 530 541 629 548 544 648 447 506 516 6,304

Area outside region(6) 0 0 0 0 0 0 0 0 0 0 1 0 0 1

New Zealand(4,5,5)

1,559

1,230

1,372

1,277

1,478

1,513

1,520

1,639

1,658

1,381

1,312

1,493 17,432

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CHRISTCHURCH• Momentum really starting in Residential • Since 4 September 2010, almost 3,900 earthquake-related consents have been

identified in Canterbury, totalling $888 million. • This includes 714 new dwellings, of which 150 were relocatable units. (also incl

alterations, etc) • Priority is about ensuring the timely repair and rebuilding of residential areas. • Managing the residential red zone process and clearing these areas. It also involves

ensuring adequate land supply, and housing. Real progress in the suburbs.• CERA works closely with insurers and EQC on the progress of claim settlements and

resolving any remaining blockages. • Encouraging private sector innovation like the Firth-designed “Rib-Raft” foundation

systems that can be used in TC3 areas.• Finishing the demolitions in the Christchurch Central Rebuild Zone and beginning the

construction phase is well underway, hope to see the cordon gone by the middle of this year.

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NZ Aluminium Smelter

• Rio set up Pacific Aluminium – 1 Bauxite plant, 5 smelters (Australia / NZ)

• Divesting as a standalone entity (aluminium has hurt Rio Tinto, propped up by

Iron Ore)

• NALCO in open dialogue over last 2 years• Protected our position testing supply from outside NZ• Significant increases in premiums on aluminium• Market is in “contango” (forward or future trades above current spot price)

• Deutsche Bank say Chinese producers will be significantly cash negative at current prices.

• Lack of demand strength from global marketplace• Southland – 800 workers = 1.5% of workforce (Southland

unemployment at just 4.6%)

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NALCO YEAR END MARCH 2013

• 10% up on YE March 2012 in overall sales / volume • Building products up 15%• Industrial up 8%• Export down 7% (influenced by Aussie downturn /

alternate supply / French)• NALCO Hamilton have continuously strived to contain

cost, but small orders and pack sizes painful • Other NALCO costs

– S&A’s up 7% – Overheads down 6% (also down 5% previous year)

• Success in being paid - average 2 day improvement over the full 2012-13 year (DSO)

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Health and Safety

• Some history – 2008 = 7 LTI, 23 MTI incidents with a FR of 52– 2009 = 3 LTI, 22 MTI incidents with a FR of 49– 2010 = 3 LTI, 19 MTI incidents with a FR of 47– 2011 =1 LTI, 11 MTI incidents with a FR of 25– 2012 = 1 LTI, 10 MTI incidents with FR of 26

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SUCCESSES

• Shift to new Highbrook site• All Seasons suite take up (15% of sales in March)• Hamilton cost containment performance under difficult

market conditions• Seamless Upgrade of SAP computer system• Zinc Smelter Industrial value add orders

– (Nystar Tasmania, Canada)

But…..Not so good• Stellar Door flat panel designs (TGV)• Some All Seasons shapes• Clarity on our service level ability

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GOING FORWARD

• Be better with service level clarity / communication / *performance (*particularly South Island).

• Grow Licensee market share off the back of:– Existing Nulook capability (quality of representation, not the quantity)– Work to develop skills and professionalism through our network– Build awareness of our products and capability within the Industry by combinations of both

NALCO and Licensee activity / focus

• Grow share in volume build via both Bradnams and willing Nulook Licensees

• Building Products Systems focus:– Front end systems– Focused product development with end to end delivery

• Building on “NALCO” brand awareness– Industrial– Master Builders Commercial sponser

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GOING FORWARD (cont)

• Value add Industrial opportunities– Patents in progress in key international markets relating to smelter opportunities– Second CNC router about to be commissioned at Highbrook

• Hamilton building extensions for future press, paintline and warehouse development.

• New Bradnams factory in Christchurch – end of July

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Questions?

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Nulook’s Vision for the Future

• Nulook to become NZ’s leading Licensee brand!– Measured by

• Profitability (Licensee level)• Market Share (National)• Customer rating (Builders & Architects

surveys) and • DIFOT

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Nulook Values

–Values shape our actions• Quality• Reliability• Innovation • Trust

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Nulook Strategic Goals

1. Unite Nulook under a common brand

2. Increase Nulook networks capability

3. Improve Licensee market presentation

4. Improve Licensee professionalism

5. Increase Licensee profitability

6. Grow Nulook market share

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Unite Nulook

• Interdependence is needed to build a strong brand.

• We all have an important role to play • Balance giving up personal freedom v

achieving the vision!• Quality of our commitment & discipline

(not a rod)• We rely on one another, Strength in unity!• What new opportunities might this bring?

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Unite Nulook

• Unite Nulook under a common brand

• Over 85% of Nulook Licensee’s have either – Changed – Agreed to change

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Licensee Capability Development

• Learning & development, offered in Auckland & Christchurch– How we make Windows and Doors-

WeatherTight™– Management & Production Planning 1– Sales Fundamentals and Advanced Sales– Human Resources

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Licensee Capability Development

• New Courses to be added– Commercial,– Financial Management

• New locations to be added– Dunedin, Nelson, Palmerston North– Subject to attendance Confirmations!– Minimum numbers required 6

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Commercial Training

• Standardising your Project Management Process

• Identifying Opportunities within Projects• New Mill Run Discounts• Seismic Movement• Wind loads on Commercial Projects• Use of sealants on Commercial projects

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Improve Nulook’s Market Presentation

• Improve Nulook’s visual identity• New Nulook Branding

– This is not a smorgasbord• Increase the number of Nulook showroom

displays• Improve the quality of Nulook Showrooms• Tighter brand controls, and controls on IP

use

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Improve Licensee Professionalism

• Increased Training Available from NALCO• Introduce business systems for the

network to use• Help systemize your business, making it

less reliant on individuals.• Encourage Account and Business plans

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Increase Licensee Profitability

• Regionals Sales Managers assistance– Help growing your business– Identifying Opportunities locally (BCI)– Providing/Gaining Specification with Architects– Helping develop Licensee Account/Business

plans– Nulook Promotional Activity

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Grow Nulook Market Share

• Working with Licensee’s to grow their Business

• Capitalise on Opportunities that exist in the market

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Nulook Promotion Plans

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Nulook Promotion Plans

• Builders Promotions– 8 week promotion– June & July– October & November– Prize draws, likely to be Dewalt prizes

• Architects Promotion– August & September– February & March

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Nulook Promotion Plans• Objectives are:

– Promote AllSeasons™ suite– Build subscription for Nulook direct emails– Develop attraction and appreciation to Nulook

products– Reward those buying Nulook (encourage loyalty)

• Notification– Direct mail & Direct Email Campaigns– Collateral for Licensee’s to give out

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Business Indicators

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Consent Trends September to February Building Consents

2011 2012 2013 % Change for 2012 % Change for 2013

Northland 299 332 312 11% -6%

Auckland 1,693 1,977 2,600 17% 32%

Waikato 760 826 964 9% 17%

Bay of Plenty 411 529 586 29% 11%

Gisborne 74 59 37 -20% -37%

Hawke's Bay 239 188 185 -21% -2%

Taranaki 211 156 208 -26% 33%

Manawatu-Wanganui 231 221 311 -4% 41%

Wellington 615 586 590 -5% 1%

North Island 4,533 4,874 5,793 8% 19% New Zealand 6,688 7,292 9,002 9% 23%

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Consent Trends

Tasman 143 120 157 -16% 31%

Nelson 98 102 136 4% 33%

Marlborough 92 110 87 20% -21%

West Coast 79 87 59 10% -32%

Canterbury 1,168 1,511 2,152 29% 42%

Otago 433 380 502 -12% 32%

Southland 142 108 116 -24% 7%

South Island 2,155 2,418 3,209 12% 33%

New Zealand 6,688 7,292 9,002 9% 23%

September to February Building Consents

2011 2012 2013 % Change for 2012 % Change for 2013

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Key Dates

• Final Registration date 1 June

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