1. 1 Prospects for the New Look Tenon John Dell Chief Executive, Tenon Limited Crowne Plaza Hotel, Auckland 16 November 2004

2. 2 First, a bit of history Fletcher Challenge Forests was a vertically integrated business, dominated by investment in forest resource Characterised by: Capital intensive and low returns Not earning cost of capital Declining long term product price trend / increasing global supply profile Persistent under-valuation by equity market Pension funds natural owners

3. 3 Why we sold the forest assets Forest returns low and volatile Processing and distribution returns high and growing Return on Assets at Operating Earnings Level

4. 4 A bit more history November 2002 Forest divestment strategy announced March 2003Sale of Teal cutting rights for $121m February 2004Sale of forests to Kiwi Consortium for $560m April 2004Sale of Tarawera cutting rights to Hancock for $165m June 2004Rubicon acquires majority control of Tenon October 2004Substantial completion of forest sale process October 2004Strategic review of structural business commenced

5. 5 Excess capital is being returned to shareholders $349m returned to shareholders in March 2004 Forest sale now substantially complete - 98% of cash received Further $321m intended to be returned early 2005 This further capital return represents $1.15 per existing share

6. 6 15/1/03 Sale of Cutting Rights 16/6/03 Forest Sale Plan 15/9/03 Campbell Bid 19/12/03 Kiwi Sale Agreement $ Strategy is adding value – TEN Share Price (adjusted) 1/04/04 Tarawera Sale 8/04/04 Rubicon Offer

7. 7 A focus on manufacturing, marketing and distribution of solid wood products, characterised by: –Relatively low capital intensity –High and increasing returns on capital –Significant investment in distribution –Strong market positions –Significant growth opportunities To the future

8. 8 Structural building solutions For the Australian and New Zealand building sectors Key customers –Frame and truss manufacturers –NZ Building merchants –Australian timber/panel distributors –Rural supply merchants Key drivers –Building sector activity, particularly residential – brand performance

9. 9 Structural business strategic review Received unsolicited approaches in relation to our Structural business Undertaking a strategic review Good assets, good market position, good brand With plans for growth But - will sell if this maximises value to shareholders

10. 10 For the North American, Asian and European markets Key customers –American Wood Moulding The Home Depot –Empire Lowe’s –US millwork manufacturers –Zenia House in Europe –European / Asian furniture manufacturers Key drivers –US repair and remodelling spend –Furniture buyers’ acceptance of Radiata pine Appearance wood products

11. 11 Manufacturing facilities – combined capacity 900,000 m 3

12. 12 14 th largest US retailer Second largest US home improvement retailer 900 stores Second largest US retailer Largest US home improvement retailer 1,600 stores US distribution 50% holding in AWM - supplier to The Home Depot 67% holding in Empire - supplier to Lowe’s Trade NZ Exporter of the Year – wood products category AWM – The Home Depot’s category vendor of the year Increased Empire shareholding from 33% to 67% Empire/AWM Combined sales exceed US$300 million

13. 13 US distribution centres and service areas The Empire Company 67% owned American Wood Moulding 50% owned

14. 14 Growth Tenon Consumer Solutions – 10,000 stores by 2010 Expand US position – through acquisitions and organic growth Replicate US channel-to-market model in Europe, providing –A supply channel for high value product, and –Equity profits China –US$24b home renovation market growing at 30% per annum –Global furniture manufacturing centre –Establishing key relationships

15. 15 Acquired 20% Zenia House

16. 16 Financial outlook Underlying earnings growth in excess of 30% Marked by impact of foreign exchange movement and corporate costs $million Actual FY04 Sales 556 EBITDA 64 (before Unusual Items) Projected FY05 735 64

17. 17 Balance sheet Projected net debt to total market cap 2005 – 25% Borrowing covenants –Gearing – net debt / EBITDA âPolicy max 3.0 x âProjected 2005 1.7 x –Interest cover – EBIT / interest expense âPolicy min 3.0 x âProjected 2005 6.5 x

18. 18 Summary Forest divestment strategy successfully implemented Diversified targeted market exposure –Australasia, US, Europe, Asia Decision on continued ownership of Structural business will be based on maximising shareholder value Defined growth plans Shareholder value focus strongly evidenced by strategy and actions