James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Shareholder Meeting (August 2005)
29 slides from James Hardie Industries's shareholder meeting presentation, Aug 19, 2005
Slide 1: Chairman's Address to 2005 Annual Meetings
Chairman’s Address to 2005 Annual Meetings Check against delivery My focus today is firmly on James Hardie’s achievements. | don’t propose to use this Address to re-visit history. | believe we have done that adequately through my address to you at last year’s meeting, our public statements since the
Slide 2: We are working to implement the Heads of Agreement
We are working to implement the Heads of Agreement And we are committed to signing a legally-binding Principal Deed with the NSW Government which implements in the shortest possible time the Heads of Agreement which the NSW _ Government, James Hardie and others signed last December. We continue to w
Slide 3: Legal costs and government reforms
The same report estimated that legal costs were at that time running at 35% of the net costs of settlement’. To put this into even sharper perspective, KPMG has estimated that system costs could be costing both plaintiffs and defendants around $2 billion (in today’s dollars) of the estimated total A
Slide 4: What is in the Principal Deed?
Following the completion of all the requirements | have outlined, there will be a shareholder vote at an Extraordinary General Meeting. The details of all of these will be communicated to you separately. What is in the Principal Deed? In summary, your directors are seeking in the Principal Deed an a
Slide 5: Draft Nine of the Principal Deed
We are currently considering Draft Nine of the Principal Deed, recently prepared by the Government. Unfortunately, as we advised the market on Wednesday, the Government's negotiating team sought to introduce into Draft Nine a number of new matters which were not raised during lengthy face-to-face me
Slide 6: Independent governance reviews
Seeking reassurance about the underlying health of the company’s governance, the Board commissioned two independent reviews to examine various aspects of the company’s governance practices. First, even before the release of the findings of the Commission of Inquiry last year, the Board's Audit Commi
Slide 7: Board renewal and new directors
| am confident that we will be able to attract people of the calibre we need, by offering them the challenges and rewards of being involved with a high growth company in a vast market with an outstanding product and people, despite the demands of time and travel for this busy global Board. We are ta
Slide 8: Our business operations are strong
Our business operations are strong We announced our results for the 2005 Fiscal Year in May. Despite the many challenges we were facing in Australia, these were very pleasing. They are reflected in the accounts you are considering today and those in our Annual Report which you have received. This mo
Slide 9: James Hardie 2005 Annual Information Meeting
@ James Hardie ll James Hardie 2005 Annual Information Meeting 19 August 2005 Louis Gries, CEO
Slide 10: Results FY05
@ James Hardie ) James Hardie Results FY05 Unless otherwise stated, results are for continuing operations only and comparisons are of the 4th quarter of the current fiscal year versus the 4th quarter of the prior fiscal year.
Slide 11: Highlights — FY05
l @ sames Hardie Highlights — FY05 Full Year = USA Fibre Cement — EBIT up 24% » Australia and New Zealand Fibre Cement — EBIT up 20% # Philippines Fibre Cement — EBIT more than doubled = Chile Fibre Cement — positive EBIT in all quarters « Hardie Pipe — significant reduction in EBIT loss
Slide 12: Exceeding targets
@ James Hardie |) Exceeding targets FY’05 Actual Long Term Target p.a. Revenue Growth 23% >15% EBIT'/Sales 16%* >15% ROA (EBIT'/GCE) 23% >15%
Slide 13: USA Fibre Cement — FY05
@ James Hardie USA Fibre Cement — FY05 Full Year Result Net Sales up 27% to US$939.2 million Sales Volume up 22% to 1855.1 mmsf' Average Price up 4% to US$506 per msf' EBIT' up 24% to US$241.5 million EBIT Margin‘ down 0.8 pt to 25.7%
Slide 14: Top Line Growth
James Hardie Top Line Growth $1,000 $900 $800 _ oe $7 a $600 = $500 $400 $300 $200 $100 Revenue (255 JH Volume =~ JH Revenue wt Housing Starts Volume (mmsf) / Starts (000's Units}
Slide 15: Asia Pacific Fibre Cement — FY05
@ James Hardie Asia Pacific Fibre Cement — FY05 Full Year Result Net Sales up Sales Volume up EBIT' up EBIT Margin: up 7% to US$236.1 million 4% to 376.9 mmsf! 25% to US$46.8 million 2.7 pts to 19.8%
Slide 16: Results Q1 FY06
@ James Hardie ) James Hardie Results Q1 FY06 Unless otherwise stated, results are for continuing operations only and comparisons are of the 4th quarter of the current fiscal year versus the 4th quarter of the prior fiscal year.
Slide 17: Overview — Q1 FY06
@ James Hardie Overview — Q1 FY06 Strong 1%* Quarter results # Strong top-line growth within our targeted range = Sales volumes in US below targeted range = Very strong EBIT growth
Slide 18: 1st Quarter
@ James Hardie 1st Quarter Net Sales Gross Profit EBIT Operating Profit from Continuing Operations Net Operating Profit Including Discontinued Operations up up up up up 10
Slide 19: Highlights — Q1 FY06
@ James Hardie Highlights — Q1 FY06 1st Quarter # USA Fibre Cement — EBIT up 49% = Australia and New Zealand Fibre Cement — EBIT flat » Philippines Fibre Cement — EBIT growth * Hardie Pipe — EBIT loss reduced = Chilean Fibre Cement — sold July = New Debt facilities 11
Slide 20: Future Strategy
@ James Hardie James Hardie Future Strategy
Slide 21: Unique technology and scale
@ James Hardie Unique technology and scale Sustainable Competitive Advantage = Unique plant engineering and proprietary process technology and product formulations « Superior capital cost efficiency — plant capital cost less than % that of competitors = Largest, lowest cost manufacturer — plant oper
Slide 22: R&D is a key driver of growth
@ James Hardie i R & Dis a key driver of growth Capabilities and resources 131 scientists, engineers and technicians US$27 million spend — 2.2% of net sales Core projects = new proprietary engineered raw materials * New proprietary product formulations » New engineering and proprietary process techn
Slide 23: USA Fibre Cement Strategy
@ James Hardie USA Fibre Cement Strategy Strategy « Aggressively grow market for fibre cement « Grow our overall market position while defending our share in existing market segments « Offer products with superior value to that of our competitors, introducing differentiated products to reduce direct
Slide 24: JH Plant Design Capacity
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Slide 25: Asia Pacific Fibre Cement
@ James Hardie Asia Pacific Fibre Cement Strategy « Grow primary demand for fibre cement = Vigorously protect and grow category share in existing market segments # Leverage our superior technology to offer differentiated products and systems with superior value to those of competitors 17
Slide 26: Australia and New Zealand
@ James Hardie Australia and New Zealand « Higher value differentiated products = Lower delivered cost # Shift to growth model 18
Slide 27: Conclusion
@ James Hardie Conclusion » We have a strong, well established, high growth and return business » We have sustainable competitive advantage = Our model for continued strong growth is based on: » Large market opportunity = Superior value proposition = Proprietary and/or protected technology = Large u
Slide 28: Disclaimer
HRA James Hardie IO : Disclaimer This Presentation contains forward-looking statements. We may from time to time make forward-looking statements in our periodic reports filed with the Securities and Exchange Commission on Forms 20-F and 6-K, in our annual reports to shareholders, in offering circula
Slide 29: EBIT and EBIT Margin definitions
a James Hardie EBIT and EBIT Margin - EBIT is defined as operating income. EBIT margin is defined as EBIT as a percentage of our net saies. We believe EBIT and EBIT margin to be relevant and useful information as these are the primary measures used by our management to measure the operating profit o
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