The name the world builds on
Final results for the year ended 31 July 2008
22 September 2008
This presentation contains certain forward-looking statements. By their nature, such statements involve uncertainty; as a consequence, actual
results and developments may differ from those expressed in or implied by such statements.
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1
Agenda
• Introduction
• Financial review
• Outlook
• Update on operations and strategy
• Q&A
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2
Introduction
• Unprecedented market conditions
• Experienced management team focused on cost reduction and cash
maximisation
• Good progress on ensuring adequate covenant headroom
• Determined to take the tough action required to navigate cycle
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3
Financial Review
Summary of results
Lower profit reflects losses in Stock Building Supply, exceptional costs
and impairment provisions
2008
£m
2007
£m
Change
%
Con’t curr’cy
change %
16,549
16,221
2.0
0.0
Trading profit*
683
877
(22.1)
(23.7)
Exceptional restructuring costs
(76)
-
(306)
(124)
301
753
(60.1)
(60.8)
(156)
(119)
527
758
(30.5)
(31.4)
EPS* (p)
56.58p
87.80p
(35.6)
(36.6)
Dividend (p)
11.25p
32.40p
(65.3)
(65.3)
ROGCE
9.6%
13.7%
Cash flow conversion
185%
148%
Gearing
73.5%
71.5%
5x
7x
Revenue
Goodwill and acquired intangibles
Operating profit
Net finance costs
PBT*
Interest cover**
*Before exceptional items and amortisation and impairment of acquired intangibles
** Interest cover is trading profit divided by net finance costs, excluding net pension related finance costs and the
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5
impairment of investments
Debt covenant calculation
Cost reduction and improved cash management result in comfortable
covenant headroom at 31 July
2008
£m
2007
£m
Operating profit
301
753
Amortisation and impairment of acquired intangibles
306
124
Depreciation and other amortisation
242
191
Exceptional items
76
-
Depreciation included in exceptional items
(9)
-
5
37
921
1,105
Year end net debt
2,469
2,467
Net debt: EBITDA
2.7
2.2
Covenant limit
3.5
3.0
Acquisition/disposal adjustment
Covenant EBITDA
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Actions taken to improve cash position
Over £1.2 billion extra headroom created over the last year
£m
Items that have reduced debt in 2008
Reduced working capital
350
Business and asset disposals
102
Receivables factoring
74
Reduction in net debt for year to 31 July 2008
526
Other actions to conserve cash
Reduced capex spend compared to original budget
183
Reduced acquisition spend compared to original target
227
936
Items that have reduced debt in 2009 to date
Receivables factoring
78
Business and asset disposals
46
Cancellation of final dividend
150
Total impact of actions taken
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1,210
7
Additional actions to improve headroom
Further working capital improvement expected
• Further working capital improvement (over 10% by 31 July 2009)
• Further reduction in capex by £140 million to £180 million
• Proposed extension of receivables factoring
• Property and business disposals
• Confident of covenant compliance
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Liquidity
Strong liquidity position – committed, undrawn facilities
of nearly £1.2 billion
Committed facilities £3,875m
undrawn £1,159m
Committed Facilities
5,000
4,500
Maturing in year:
£135m
£0m
£105m
£2,500m
4,000
3,500
£m
3,000
2,500
2,000
3,875
3,740
3,740
3,635
1,500
1,000
1,135
500
0
31-Jul-08
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31-Jul-09
31-Jul-10
9
31-Jul-11
31-Jul-12
Cash flow
Operating cash flow nearly £1.3 billion
2008 £m
2007 £m
Trading profit
683
877
Exceptional items
(76)
-
Depreciation and profits on sale of property
226
164
Decrease in working capital
424
238
5
20
Cash flow from operating activities
1,262
1,299
Acquisitions (including net debt acquired)
(244)
(1,719)
102
62
Capital expenditure
(317)
(396)
Net interest paid
(135)
(117)
(99)
(167)
Dividends paid
(215)
(198)
Currency translation
(321)
86
(35)
633
(2)
(517)
Share based payments and other non cash items
Property and business disposals (including debt disposed of)
Tax paid
Other including share placing
Increase in net debt
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Working capital - cash to cash days
30% improvement over last two years
Improvement over
FY06
FY07
FY08
2 years
1 year
Spot inventory days
68.8
63.7
60.9
7.9
2.8
Spot receivables days
52.7
51.3
49.2
3.5
2.1
(56.3)
(63.2)
(64.2)
7.9
1.0
65.2
51.8
45.9
19.3
5.9
29.6%
11.4%
Spot payables days
Spot cash to cash days
Improvement
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Exceptional costs and benefits from restructuring and
business initiatives
Incremental benefit of £129 million in 2009
Cost £m
Headcount
reduction
Benefit
£m pa
Benefit
£m ytd
UK and Ireland
12
450
17
-
France
21
710
11
1
Nordic
3
350
2
-
Central and Eastern Europe
2
120
4
-
European central costs
4
10
2
-
Europe
23
1,640
36
1
US plumbing and heating
21
2,250
74
26
US building materials
6
3,150
62
19
Canada
5
50
3
1
32
5,450
139
46
2
10
1
-
76
7,100
176
47
North America
Group central costs
Total
Headcount reduction also includes natural labour turnover and previously announced plans in process
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Goodwill and intangibles
One-off impairment provisions
Amortisation of acquired intangibles
2008
£m
2007
£m
135
119
114
5
Goodwill and acquired intangibles impairment
- Stock Building Supply
- Ireland
- Italy
46
Total amortisation and impairment of acquired intangibles
Software amortisation
171
-
11
-
306
124
15
9
5
IT development costs impairment
- BCP in Central and Eastern Europe
12
- Other
Total amortisation and impairment of software
Total
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13
15
-
3
-
30
9
336
133
-
Finance costs
One-off impairment of equity investment
2008
£m
2007
£m
Net interest payable
(136)
(118)
Other finance costs
(1)
1
(137)
(117)
3
(2)
(22)
-
(156)
(119)
Pension finance income/(charge)
Impairment of equity investment
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US plumbing and heating
Market outperformance
Revenue
2007
Acq’n
£m
£m
£m
5,685
206
411
21
Trading profit
Trading margin
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
(132)
(2.4)
(146)
5,613
(1.3)
1.3
(25)
(6.2)
(10)
397
(3.3)
(0.8)
Organic Change
7.2%
7.1%
• Market slowdown but strong market outperformance
• Gross margin stable, despite pricing pressure
• Trading margin reflects increase of £11 million provision for doubtful debts, higher fuel
and infrastructure costs
• Like for like trading margin unchanged
• Headcount reduced by 2,250 employees with 123 branches closed
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US building materials
Market outperformance but profit hit by housing slowdown
Revenue
2007
Acq’n
£m
£m
£m
2,358
63
44
5
Trading profit
Trading margin
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
(626)
(27.2)
(60)
1,735
(26.4)
(24.5)
(171)
(397.2)
(1)
(123)
(379.0)
(386.3)
Organic Change
1.9%
(7.1)%
•
•
•
•
New housing starts fell 29%, Stock’s same store sales declined 21%
Outperformanced in all districts, particularly in second half
Gross margin pressure continued
$150m of costs removed in 2008, including 36 branch closures and headcount
reductions of 3,150
• Trading loss reflected £32m of higher provisions for doubtful debts
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Canada
Residential market held up but profits marginally down
2007
Acq’n
£m
£m
£m
619
6
42
-
Revenue
Trading profit
Trading margin
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
4
0.5
55
684
10.5
1.4
(7)
(15.1)
4
39
(6.4)
(14.1)
Organic Change
6.8%
5.8%
• Residential market held up, largely avoiding the problems of US housing
• Strength of C$ affecting exporting industries and causing some price deflation in goods
from the US
• Prior year benefited from C$10m of one-off property profits and other items
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UK and Ireland
Tougher trading conditions impact results
Revenue
2007
Acq’n
£m
£m
£m
3,171
13
211
-
Trading profit
Trading margin
•
•
•
•
•
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
(11)
(0.3)
30
3,203
1.0
0.1
(37)
(17.5)
2
176
(16.6)
(17.4)
Organic Change
6.7%
5.5%
UK housing market slowed significantly and RMI also affected
Housing starts in Ireland around 60% lower
Government spending on social housing, health and education remains positive
Excluding Ireland, the UK achieved organic revenue growth of 1.8%
Gross margin improved
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Nordic
Another strong performance with revenue and profit growth
Revenue
2007
Acq’n
£m
£m
£m
1,617
387
99
28
Trading profit
Trading margin
•
•
•
•
•
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
31
1.7
162
2,197
35.9
23.5
22
19.9
10
159
59.9
45.4
Organic Change
6.1%
7.2%
Results reflect extra 2 months trading in 2008
Markets in Nordic region slowed particularly in new housing and DIY
Professional RMI more difficult in past 3 months
Outperformed local markets
Excellent cost control and working capital management
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France
Continued focus on market repositioning
Revenue
2007
Acq’n
£m
£m
£m
1,872
83
101
9
Trading profit
Trading margin
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
(27)
(1.3)
188
2,116
13.1
2.7
(17)
(15.0)
10
103
2.1
(7.2)
Organic Change
5.4%
4.9%
•
•
•
•
New residential and RMI markets slowed
Less positive business environment
Performance improved over course of year
Trading profit benefited from £8m of property and asset disposals, acquisitions and
currency exchange
• Disposal of tool hire business
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20
Central and Eastern Europe
Profits impacted by business disruption and IT impairment charge
2007
Acq’n
£m
£m
£m
899
39
35
-
Revenue
Trading profit
Trading margin
Exch
2008
Ch’ge
Cons’t
%
£m
£m
%
Cur’y %
(32)
(3.3)
95
1,001
11.2
0.6
(38)
(101.7)
3
-
(100.7)
(100.6)
Organic Change
3.8%
0.0%
• Gross margin lower with price deflation in some commodities, particularly insulation
• Trading profit affected by business disruption from IT in Austria and DC in Italy, and £12m
IT impairment
• Excellent progress continued in Switzerland with trading margin of 8.2%
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Outlook
Focus on cost reduction and cash maximisation
• Markets likely to deteriorate
• US commercial and industrial markets likely to remain stable for next
few months
• Focus on cost reduction and cash maximisation
• Further restructuring and fundamental review of Stock
• Confident of covenant compliance
• No plans to raise equity or renegotiate covenants
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Wolseley
the name the world builds
on
Year on year trading performance
Dramatic impact of Stock loss in 2008
Trading Profit By Cluster
411
397
Ferguson
Stock
44
-123
42
39
Canada
211
UK and Ireland
176
35
CEE
0
99
Nordic
159
101
103
France
-150
-50
50
150
£m
The name the world builds on
2007
2008
24
250
350
450
Lowering the cost base
Significant progress to date
• Reduction in headcount and locations
• Cash flow generation remains a central focus of the business
• Capital expenditure curtailed significantly to reflect conditions
• Asset disposals where acceptable returns achievable
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FY 2009 focus
Further actions in line with market conditions
• Maintain appropriate cost base
• Restructuring actions announced today
• Further action appropriate to market conditions
• Cash flow generation and cost containment
• Improvement in working capital days of at least 10%
• Reduction in discretionary and capital spend
• Further asset disposals where value can be realised
• Re-phasing of Business Change Programme in 2009
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Summary
• Unprecedented market conditions
• Experienced management team focused on cost reduction and cash
maximisation
• Good progress on ensuring adequate covenant headroom
• Determined to take the tough action required to navigate cycle
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Q&A
Appendices
Market strategy
“Wolseley is a distributor of construction materials and a provider
of construction services to primarily professional contractors,
industry and government in Europe and North America.”
Outstanding local companies successfully serving customers in
home markets.
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What is Wolseley?
•
Founded in 1887 in Australia as the Wolseley Sheep Shearing Machine
Company Limited
•
Nine years later the first Wolseley motor car was produced in Birmingham, UK
•
1999 – finally exited all manufacturing to focus on construction materials
distribution
•
Now world’s number one plumbing and heating distributor to the professional
market and a leading supplier of building materials
•
Operations in 27 countries
•
Around 5,310 locations
•
Around 78 in the FTSE 100 with market capitalisation of c£2.6bn
•
£16.5bn of sales and £683m of trading profit in year ended 31 July 2008
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Who are we?
Significant growth opportunity from scale and diversity
Leading supplier of construction products and services in North America
and Europe
Growth
Scale/Size
•
•
•
•
Diversity
•
•
•
•
Unique footprint
DC/branch network
Sourcing opportunities
Acquisitions
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Geography
Business segment
Customer type
Product/service offering
Wolseley group total – revenue & profits
Sterling millions 1982 - 2008
1,700
100 %
Revenue
£14bn
1,500
Profit
ROGCE
ROC
80 %
1,300
£12bn
Revenue
90 %
Profit
70 %
1,100
£10bn
£1,000m
60 %
900
£8bn
50 %
700
40 %
£6bn
500
£4bn
300
£800m
£600m
30 %
£400m
20 %
£200m
£2bn
100
0
-100 82/3
10 %
84/5
86/7
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88/9
90/91
92/3
94/5
33
96/7
98/9
00/01 02/03
04/05 '06/07
-
0
Organisation & operating brands
North America
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Europe
34
Group revenue & trading profit
Twelve months ended 31 July 2008
US Plumbing
and Heating
33.9%
US Building Materials
10.5%
UK and Ireland
19.4%
US Plumbing
and Heating
52.9%
Nordic
13.3%
Trading profit
US Building
Materials
(16.4)%
UK and
Ireland
23.4%
France 12.8%
Canada 4.1%
CEE 6.0%
France
13.7%
Revenue
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Nordic
21.2%
35
Canada 5.2%
CEE 0.0%
Our diverse customer mix
% of group revenue, twelve months ended 31 July 2008
HVAC 4.6% Industrial 5.2%
Utilities 6.5%
Mechanical
Contractors 10.5%
Plumbing and
Heating Contractors
22.8%
End Users 10.1%
Electrical
Contractors 2.0%
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Building Contractors
38.3%
North America
Plumbing and Heating
Alaska
Wolseley Canada
2008 - 254 branches
Distribution Centre
Hawaii
Proposed DC
Pipeyard
Ferguson
2008 – 1,382 branches
Also in Puerto Rico, Panama, Trinidad & Tobago and Mexico
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37
North America
Building Materials
Stock Building Supply
2008 – 285 branches
Distribution Centre
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38
Europe
Branch numbers
1 UK (1,834)
2 Ireland (93)
3 France (848)
4 Belgium (14)
5 Netherlands (30)
6 Luxemburg (2)
7 Switzerland (40)
8 Italy (53)
9 San Marino (1)
10 Romania (9)
11 Hungary (34)
12 Slovakia (21)
13 Austria (72)
14 Czech Republic (43)
15 Poland (14)
16 Denmark (140)
17 Norway (14)
18 Sweden (101)
19 Finland (21)
20 Greenland (5)
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20
18
19
17
2
16
1
5
4
3
15
6
14
13
7
12
11
8
9
39
10
Business drivers 2008 & 2007
% of divisional sales
Revenue £m
North America
Plumbing & Heating
North America
Building Materials
Europe
9,000
4%
8,000
4%
7,000
11%
6,000
13%
14%
5,000
17%
18%
15%
4,000
31%
3,000
14%
17%
41%
41%
29%
24%
34%
8%
2,000
16%
1,000
23%
13%
14%
20%
12%
16%
79%
72%
0
Residential new construction
Residential RMI
Non residential new construction
Non residential RMI
Civil infrastructure
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Branch numbers
31 July
2007
Net
closures
Acquired
31 July
2008
1,917
5
5
1,927
France
825
(7)
30
848
Nordic
275
3
-
278
Central & Eastern
Europe
294
30
12
336
1,417
(52)
17
1,382
Canada
260
(6)
-
254
US Building Materials
308
(34)
11
285
5,296
(61)
75
5,310
UK & Ireland
US Plumbing & Heating
Group total
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41
Branch growth
5500
5000
4500
4000
1636
308
285
3311
3389
2007
2008
1483
3500
3000
961
2500
2000
1677
911
1500
504
131
1000
1357
591
210
1443
1615
2000
2001
220
940
222
216
1799
2266
2002
2003
1008
236
2393
1179
314
255
2486
2906
500
0
1999
2004
2005
2006
Year to July
Europe
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US Building Materials
42
US Plumbing and Heating and Canada
Financial targets
•
•
•
•
•
Double digit sales growth with 5% organic and 5% through acquisition
Greater than 10% profit growth
Aspirational 7% trading margin
Return on gross capital employed of at least 4% above pre tax WACC
Gearing – net debt/shareholder funds
• Long term average – less than 75%
• Short term accept 100% or more – but projections must show a return to long term
average within 2 years
• Interest cover – EBITA/Net interest
• Long term average – greater than 7x
• Short term c5x – but projection must show a return to long term average within 2
years
• Net debt to EBITDA ratio of 1.5 to 2.3
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43
Acquisition strategy
•
•
•
•
•
•
Increase market share
Platform for organic growth
Expand geographic coverage
Expand service and product range
5% organic growth from bolt on acquisitions following completion
Target of £450 million spend on bolt ons and expect one substantial
acquisition every 2-3 years on average
• Return criteria
• Bolt on acquisitions – ROGCE of 5% >WACC by year 3
• Strategic acquisitions – ROGCE of 5% >WACC by year 5
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44
Acquisition spend
2,200
2,000
1,800
1,600
1,400
£m
1,200
1,000
800
600
400
200
0
2000
2001
2002
2003
2004
2005
2006
Year to July
Europe
US Plumbing and Heating and Canada
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45
US Building Materials
'Strategic' Acquisition
2007
2008
Financial detail for year ended
31 July 2008
North America
Ch’ge
Con’t
cur’cy
2007
Acq'n
Organic
change
Exch
2008
£m
£m
£m
%
£m
£m
%
Ch’ge
US Plumbing & Heating
5,685
206
(132)
(2.4)
(146)
5,613
(1.3)
1.3
US Building Materials
2,358
63
(626)
(27.2)
(60)
1,735
(26.4)
(24.5)
619
6
4
0.5
55
684
10.5
1.4
8,662
275
(754)
(8.9)
(151)
8,032
(7.3)
(5.6)
411
21
(25)
(6.2)
(10)
397
(3.3)
(0.8)
US Building Materials
44
5
(171)
(397.2)
(1)
(123)
(379.0)
(386.3)
Canada
42
-
(7)
(15.1)
4
39
(6.4)
(14.1)
NA central costs
(10)
-
2
-
(8)
Total
487
26
(201)
(7)
305
(37.4)
(36.4)
Revenue
Canada
Total
Trading profit
US Plumbing & Heating
Trading margin
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5.6%
(42.0)
3.8%
47
Europe
Ch’ge
Con’t
cur’cy
2007
Acq'n
Organic
change
Exch
2008
£m
£m
£m
%
£m
£m
%
Ch’ge
UK & Ireland
3,171
13
(11)
(0.3)
30
3,203
1.0
0.1
France
1,872
83
(27)
(1.3)
188
2,116
13.1
2.7
Nordic
1,617
387
31
1.7
162
2,197
35.9
23.5
899
39
(32)
(3.3)
95
1,001
11.2
0.6
7,559
522
(39)
(0.5)
475
8,517
12.7
6.0
UK & Ireland
211
-
(37)
(17.5)
2
176
(16.6)
(17.4)
France
101
9
(17)
(15.0)
10
103
2.1
(7.2)
Nordic
99
28
22
19.9
10
159
59.9
45.4
Central & Eastern Euro
35
-
(38)
(101.7)
3
-
(100.7)
(100.6)
Euro central costs
(13)
-
3
-
(10)
Total
433
37
(67)
25
428
(1.2)
(6.6)
Revenue
Central & Eastern Euro
Total
Trading profit
Trading margin
The name the world builds on
5.7%
(14.8)
5.0%
48
Revenue
6,000
5,000
£m
4,000
2007
3,000
2008
2,000
1,000
-
S
U
P
&H
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S
U
B
M
an
C
a
ad
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&
Ir
an
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d
a
Fr
e
nc
49
c
di
pe
r
o
o
ur
N
E
l
ra
t
en
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Trading profit
500
400
300
200
2007
2008
100
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tra
C
en
50
e
op
lE
ur
N
or
di
c
ce
Fr
an
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Ire
la
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U
K
-200
C
an
M
B
U
S
P
U
S
-100
&H
-
Trading profit
877
2007
18
Exchange
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(166)
SBS
(38)
50
(37)
(21)
683
CEE
Nordic
UK and
Ireland
Other
2008
51
Balance sheet
Strong financial position
As at
31 July 2008
31 July 2007
£m
Intangible assets
2,836
2,680
Property, plant and equipment
1,842
1,718
Inventory, receivables, payables
1,901
2,130
Retirement benefit obligations
(236)
(111)
(2,469)
(2,467)
Other assets and liabilities
(515)
(499)
Total shareholders’ equity
3,359
3,451
(2.7)%
33.1%
2.7x
2.2x
EBITA interest cover
5x
7x
EBIT interest cover
3x
6x
Net debt
(Decrease)/increase in shareholders’ equity
Credit metrics (LTM)
Net debt/EBITDA (adjusted for exceptional items and
acquisitions)
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Financial track record
Financial performance
Revenue (£m)
Trading profit (£m)
16,221
14,158
10,128
2004
882
16,549
2005
2006
2007
2008
2004
EPS (p) (pre-amortisation and
exceptionals)
98.9
74.8
2005
683
2006
2007
2008
DPS (p)
87.8
82.6
708
619
11,256
877
26.4
23.8
29.4
32.4
56.6
11.3
2004
2005
2006
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2007
2004
2008
UK GAAP
54
2005
IFRS
2006
2007
2008
Financial performance
Return on Gross Capital
Employed (ROGCE)
Trading margin
7
6.1%
6.3%
18.4%
6.2%
19.1% 18.8%
5.4%
13.7%
4.1%
9.6%
2
0
2004
2005
2006
UK GAAP
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2007
2008
2004
IFRS
55
2005
2006
2007
2008
Cash flow generation
Year to 31 July
2008
2007
2006
2005
2004*
Cash flow from operating
companies
1,262
1,299
850
765
325
Maintenance capex
(242)
(191)
(140)
(117)
(108)
(99)
(167)
(206)
(151)
(128)
(135)
(117)
(57)
(31)
(13)
786
824
447
466
76
(215)
(198)
(162)
(145)
(136)
571
626
285
321
(60)
(226)
(1,346)
(820)
(401)
(123)
(75)
(205)
(206)
(122)
(28)
(272)
408
(38)
1
96
(2)
(517)
(779)
(201)
(115)
(4.8)%
0.5%
10.9%
8.7%
13.1%
Tax
Interest
Free cash flow pre dividends
Dividends
Free cash flow after dividends
Acquisitions less disposals**
Expansion capex
Other
Movement in debt
Organic sales growth
*UK GAAP **excluding debt acquired and disposed of
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56
Capex
2008
£m
2007
£m
Freehold land and buildings
74
79
Leasehold land and buildings
28
79
133
202
99
50
334
410
Plant machinery and equipment
Software
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57
Performance in 1990/1991 downturn
Background
• Global recession
• Significant decline in California construction market
• Gulf War
• Savings & Loan crisis
• US housing starts around 1 million
• 15% of Group involved in manufacturing with higher fixed cost base
• Less diversity in the US distribution business
• No building materials distribution in Continental Europe
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Wolseley’s trading margin in early 1990’s recession
Year to 31 July
1990
1991
1992
1993
1994
Wolseley Group
7.0%
5.1%
4.9%
5.2%
6.2%
US Distribution
5.6%
3.5%
3.3%
3.9%
5.1%
Ferguson
5.5%
4.2%
3.3%
3.3%
4.2%
Stock Building Supply
6.4%
0.2%
4.8%
8.2%
8.0%
• Group Trading Profit declined by 32% in 1991 but rose by 9% in 1992
• US Distribution Trading Profit (measured in GBP) declined by 45% but rose by
3% in 1992
• Stock remained profitable and benefited from operational leverage on the
eventual economic upturn
• Ferguson’s margin dropped to 3.3% primarily because of Californian recession
•
California operation (Familian Corp) was loss making in 1991/2 and 1992/3
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59
Group cash flow performance is resilient despite soft markets
(£m; FYE 31 July)
Net Sales
Trading Profit (EBITA)
Exceptional items
Depreciation / Other
Decrease/(increase) in inventories
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Other
Change in Working Capital
Operating Cash Flow
Cash Conversion %
1990
1,847
130
1991
1,738
89
1992
1,954
96
2000
6,403
386
2001
7,195
414
2002
7,968
464
26
(8)
(10)
(2)
6
(14)
29
18
17
(22)
8
21
32
(6)
4
(5)
0
(7)
74
(76)
(20)
27
(1)
(70)
85
33
(70)
55
1
19
93
7
(24)
44
0
27
146
(171)
(243)
217
19
(178)
184
88
4
149
(3)
238
2008
16,549
683
(76)
231
220
247
(61)
18
424
142
139
121
390
518
584
850
1,299
1,262
96% 148%
185%
109% 157% 126%
2006
2007
14,158 16,221
882
877
101% 125% 126%
6
2500
5
2000
4
3
1500
2
1000
1
0
Mar
-1 90
Dec Sep
90
91
Jun
92
Mar
93
Dec Sep
93
94
-2
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Jun
95
Mar
96
Dec Sep
96
97
Jun
98
Mar
99
US GDP Growth % LHS
Dec Sep
99
00
Jun
01
Mar
02
Dec Sep
02
03
US Housing Starts #m RHS
60
Jun
04
Mar
05
Dec Sep
05
06
Jun 500
07
0
Average lumber price 1995 - 2008
$550
US$
per thousand board feet
$500
$445
$450
$390
$400
$365
$362
$350
$373
$378$400
$372
$362
$313 $313
$287
$300
$290
$263
$250
$200
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year to July
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Monthly lumber price 2003 - 2008
US$
per thousand board feet
475
2003
2004
2005
2006
2007
2008
425
375
325
275
225
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Year to July
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Jul
US housing starts
2300
2200
2100
2000
1900
1800
000’s 1700
1600
1500
1400
1300
1200
1100
1000
900
800
Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Apr- Jul03 03 03 03 04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08
Source: US Census Bureau
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New residential construction activity in U.S.
2500
Total US housing starts 1959 – 2008*
2000
1500
1000
500
19
59
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
0
Single-family Starts
Multi-family Starts
*All 2008 Data is forecasted based upon current market conditions.
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Source: Moody’s Economy.com (02/07/08)
New residential construction activity in U.S.
80
Total US housing starts 1950 – 2008*, year over year % change
60
40
20
0
-20
-40
19
60
19
62
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
-60
Single-family Starts
Multi-family Starts
Source: Moody’s Economy.com 18/8/08
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Repair and remodeling activity in the US
Residential repair and remodeling expenditure vs expenditures for new
600000
residential construction 1970–2008*
500000
400000
300000
200000
100000
(Mil. $ NSA)
19
64
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
0
Residential repair and remodeling expenditure
New Residential Construction
Source: U.S. Census: C-30 and U.S. Census C-50 Reports
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