James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — JPMorgan Asia Pacific and Emerging Markets Conference 2008
25 slides from James Hardie Industries's conference presentation, Sep 4, 2008
Slide 1: JPMorgan Asia Pacific and Emerging Markets; A growth focused company
For personal use only JPMorgan Asia Pacific and Emerging Markets September 2008 Text goes here James Hardie Agenda A growth focused company Annual net sales US$1,469m million Total assets US$2,180m Operations in North America, Asia Pacific and Europe 2,700 employees Market cap US$1.8b S&
Slide 2: Focused on Fibre Cement; First to develop fibre cement
Text goes here Focused Agenda on Fibre Cement For personal use only Investment attributes Growth focused Sustainable competitive advantage Unique proprietary technology Strong financial performance, cash flows and balance sheet¹ Track record of outperforming US housing market ¹ Excluding a
Slide 3: Industry leadership and profitable growth; Business portfolio
Text goes here Agenda Industry leadership and profitable growth For personal use only Strategy Aggressively grow primary demand for fibre cement Secure differentiated position Generate strong top line growth Win high shares of large segments Sustain attractive margins 5 Text goes here Busi
Slide 4: Quick history
Text goes here USA Fibre Cement – quick history Agenda For personal use only 1990 – 1995 Entered US in 1990 to manufacture and market roofing shakes (one line, one plant) Shifted target market from roofing to siding Moved to high throughput, low unit cost manufacturing strategy Revenue growt
Slide 5: Sustainable competitive advantage; revenue growth streams
Text goes here USA Fibre Cement Agenda For personal use only Sustainable competitive advantage Unique plant engineering and proprietary process technology and product formulations – significant investment in R&D Superior capital cost efficiency Low cost manufacturer Only national producer of
Slide 6: Sales mix; Exterior products - US siding market
Text goes here USA Fibre Cement – sales mix1 Agenda For personal use only New Construction vs. Repair and Remodel New Construction R&R Total Sales 57% 43% Exteriors products 67% 33% Interior products 25% 75% Exterior vs. Interior Products Exteriors Interiors Volume 77% 23% Revenue 82% 18% All market
Slide 7: Understanding the Repair and Remodel market; Superior product performance
Text goes here Agenda Understanding the Repair and Remodel market For personal use only Where does the product go? Replace MF 16% Replace SF 48% Repairs 27% Add & Alts 7% Repair and Remodel siding market – 6.4 billion square feet (2007 est) All market and market share figures are management estimate
Slide 8: Superior product performance continued; Interior products
Text goes here Superior Agenda product performance – continued For personal use only Fibre Cement looks and performs better than vinyl Fibre Vinyl cement ! Fire resistant ? ! Hail resistant ? ! Resists warping ? ! Resists buckling ? ! Colour lasts longer ? ! Dimensional stability ? ! Can be repainte
Slide 9: Interior products continued; Largest fibre cement producer in North America
Text goes here Interior Agenda products – continued For personal use only Attributes Protection against moisture damage and mould growth (total wet area solution) Strength Highest compressive and flexural strength available Workability Cleaner and less abrasive than glass mesh Low densit
Slide 10: Low cost fibre cement producer; Asia Pacific Fibre Cement
Text goes here Agenda Low cost fibre cement producer For personal use only PRODUCTION CAPACITY PER LINE CAPITAL COST PER UNIT OF CAPACITY (US$/SF) 350.1 0.4 3001 300.1 0.35 250.1 0.3 200 $US / SF MMSF 200.1 0.25 150 150.1 100 0.2 100.1 60 0.15 50.1 0.1 0.1 1990 1994 1998 2001 2006 FY91 FY96 FY97 FY9
Slide 11: Organisational focus: Product leadership
Text goes here Organisational Agenda focus For personal use only Product leadership Continued investment in new product development and commercialisation Value-added, differentiated products Benefits: Grow the fibre cement category Grow revenue Sustain good margins Defend and strengthe
Slide 12: ColorPlus Model
Text goes here ColorPlus® Agenda Model For personal use only Higher quality products with higher revenue stream Strategy designed to reduce ‘on the wall’ cost and close gap with vinyl siding Supply of pre-painted exterior products Reduce supply chain costs Installer education Channel inc
Slide 13: Organisational focus: Product leadership examples
Text goes here Organisational Agenda focus For personal use only Product leadership – examples USA Fibre Cement: ArtisanTM Lap (thicker siding, provides distinctive shadow lines) premium product launched in Atlanta wider launch during 2008 HardieWrapTM 25 Text goes here Organisational Agen
Slide 14: Changing US product mix; Response to US housing downturn
Text goes here Organisational Agenda focus For personal use only Changing US product mix Product mix will evolve significantly in the medium term to continue to drive revenue and leverage market position Today Tomorrow ColorPlus Next Generation HardiePlank Hardieplank/ ColorPlus Cemplank Cemplank Fi
Slide 15: Top line growth; Primary growth performance
Text goes here USA Fibre Cement Agenda For personal use only Top line growth 2,800 $1,200 JH Volume (mmsf), Starts (000s Units) 2,400 $1,000 2,000 Revenue (US$M) $800 1,600 $600 1,200 $400 800 400 $200 0 $0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 Q1 09 JH Volume JH Revenue Housing S
Slide 16: Average Net Selling Price; EBIT and EBIT Margin
Text goes here USA Fibre Cement Agenda For personal use only Average Net Selling Price 600 560 US$ per MSF 520 480 440 400 360 FY02 FY03 FY04 FY05 FY06 FY07 FY08 Q1 FY09 31 USA Text Fibre Cement goes here Agenda EBIT and EBIT Margin* 140 35 120 30 100 25 EBIT MARGIN % 80 20 EBIT US$M 60 15 40 10 20
Slide 17: Growth in revenue per employee; Long term financial targets
Text goes here Growth Agenda in revenue per employee For personal use only 700 3000 $590 US$ Thousands $561 600 $552 2500 $495 500 2000 $413 $381 $367 400 $354 $329 $326 1500 $298 300 $251 $250 1000 $166 200 $153 $115 500 100 $48 0 0 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 F
Slide 18: Q1 FY09 results overview
Text goes here Q1Agenda FY09 – results overview For personal use only Results affected by on-going weakness in all markets, particularly the US Businesses continued to outperform their markets by focusing on growing primary demand for fibre cement and targeting sales of differentiated products U
Slide 19: Corporate issues and challenges
Text goes here Corporate Agenda issues and challenges For personal use only Company faces challenges that stem from legacy issues, including: Managing obligations under Amended Final Funding Agreement (approved by shareholders in February 2007): Asbestos compensation funding; Financial results
Slide 20: Summary; Endnotes
Text goes here Summary Agenda For personal use only We have a strong, well established, growth focused and high return business We have a sustainable competitive advantage Our model for strong growth is based on: Large market opportunity Superior value proposition Proprietary and/or prot
Slide 21: Endnotes: Definitions
Text goes here Endnotes Agenda For personal use only Definitions Financial Measures – US GAAP equivalents EBIT and EBIT Margin - EBIT, as used in this document, is equivalent to the US GAAP measure of operating income. EBIT margin is defined as EBIT as a percentage of net sales. We believe EBIT and
Slide 22: Non-US GAAP Financial Measures
Text goes here Endnotes Agenda For personal use only Non-US GAAP Financial Measures EBIT and EBIT margin excluding asbestos – EBIT and EBIT margin excluding asbestos are not measures of financial performance under US GAAP and should not be considered to be more meaningful than EBIT and EBIT margin.
Slide 23: Non-US GAAP Financial Measures (continued)
Text goes here Endnotes Agenda For personal use only Non-US GAAP Financial Measures (continued) Diluted earnings per share excluding asbestos – Diluted earnings per share excluding asbestos is not a measure of financial performance under US GAAP and should not be considered to be more meaningful tha
Slide 24: Non-US GAAP Financial Measures: EBITDA; Disclaimer
Text goes here Endnotes Agenda For personal use only Non-US GAAP Financial Measures (continued) EBITDA – is not a measure of financial performance under US GAAP and should not be considered an alternative to, or more meaningful than, income from operations, net income or cash flows as defined by US
Slide 25: JPMorgan Asia Pacific and Emerging Markets
For personal use only JPMorgan Asia Pacific and Emerging Markets September 2008 In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures included in the Definitions section of this document starting on page
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