James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (March 2014)
39 slides from James Hardie Industries's investor presentation, Mar 17, 2014
Slide 1: Investor Presentation March 2014
Exhibit 99.1 INVESTOR PRESENTATION March 2014
Slide 2: Disclaimer
DISCLAIMER This Management Presentation contains forward-looking statements. James Hardie may from time to time make forward-looking statements in its periodic reports filed with or furnished to the SEC, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation
Slide 3: Disclaimer (Continued)
DISCLAIMER (CONTINUED) Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward-looking
Slide 4: Agenda
AGENDA • Business Overview • USA & Europe Fibre Cement • Asia Pacific Fibre Cement • Capital Management and Dividends • Group Outlook and Summary • Appendix In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial m
Slide 5: JHX: A Growth Focused Company
JHX: A GROWTH FOCUSED COMPANY Annual net sales US$1.5b Total assets US$1.9b Net cash US$185m Operations in North America, Asia Pacific and Europe 2,700 employees Market cap US$6+b S&P/ASX 100 company NYSE ADR listing Note: Market capitalization as at 7 March 2014. Total assets and net cash are as at
Slide 6: Group Overview
1 GROUP OVERVIEW US Millions Q3 Q3 % 9 Months 9 Months % FY2014 FY2013 Change FY2014 FY2013 Change Net operating profit excluding asbestos, asset impairments, ASIC expenses, New Zealand product 43.7 26.7 64 152.0 109.4 39 liability and tax adjustments Net Operating Profit 92.2 31.5 286.3 115.0 1 Com
Slide 7: JHX: A World Leader in Fibre Cement
JHX: A WORLD LEADER IN FIBRE CEMENT • USA and Europe Fibre Cement Products • Siding • Soffit • Fascia • Trim • Backerboard • Asia Pacific Fibre Cement Products • Residential siding • Commercial exteriors • Flooring • Ceilings and internal walls 7
Slide 8: Global Business Portfolio
1 GLOBAL BUSINESS PORTFOLIO 80% 74% 71% 26% 29% 20% Volume Net Sales EBIT* USA and Europe Fibre Cement Asia Pacific Fibre Cement 1 All numbers are for the 3 rd quarter ended 31 December 2013 *EBIT – Excludes Research and Development, asset impairments, asbestos-related items, New Zealand product lia
Slide 9: Fibre Cement: Superior Product Performance
FIBRE CEMENT: SUPERIOR PRODUCT PERFORMANCE Fibre cement is more durable than wood and engineered wood, looks and performs better than vinyl, and is more cost effective and quicker to build with than brick Fibre Cement Vinyl Engineered Wood Fire resistant ? ? Hail resistant ? ? Resists warping ? ? Re
Slide 10: Product Leadership Example: HardieZone System
PRODUCT LEADERSHIP EXAMPLE: HARDIEZONE™ SYSTEM • 7 th Generation versus 2 nd Generation generic fibre cement • The HardieZone™ System represents a logical extension of Hardie technology 10
Slide 11: The USA Business: Largest Fibre Cement Producer in North America
THE USA BUSINESS: LARGEST FIBRE CEMENT PRODUCER IN NORTH AMERICA JH Plant Design Capacity Plant locations Flat Sheet Capacity Plants (mmsf) Tacoma, WA Plants operating Cleburne, Texas 500 Additional capacity by mid 200 Peru, IL calendar year 2015 Peru, Illinois 560 Plant City, Florida 300 • Reno, NV
Slide 12: USA Fibre Cement Top Line Growth
USA FIBRE CEMENT Top Line Growth 3,000 $1,300 2,800 $1,200 2,600 $1,100 2,400 $1,000 2,200 2,000 $900 1,800 $800 1,600 $700 1,400 $600 1,200 $500 1,000 $400 800 $300 600 400 $200 200 $100 0 $0 JH Volume Housing Starts JH Revenue Rolling 12 month average of seasonally adjusted estimate of housing sta
Slide 13: Quarterly EBIT and EBIT Margin
USA AND EUROPE FIBRE CEMENT Quarterly EBIT and EBIT Margin 1 80 35 70 30 60 25 50 20 40 15 30 10 20 5 10 0 0 FY09 FY10 FY11 FY12 FY13 FY14 EBIT EBIT Margin 1 Excludes asset impairment charges of US$14.3 million in 4 th quarter FY12, US$5.8 million in 3 rd quarter FY13 and US$11.1 million in 4 th qua
Slide 14: Average Net Sales Price (US dollars)
USA AND EUROPE FIBRE CEMENT 1 Average Net Sales Price (US dollars) 670 US$651 630 590 550 FY09 FY10 FY11 FY12 FY13 Q3 YTD FY14 1 Prior period amounts have been restated to conform with current year refined methodology for calculating average net sales price 14
Slide 15: Asia Pacific Fibre Cement
ASIA PACIFIC FIBRE CEMENT • Five manufacturing plants in Asia Pacific 1 • Net sales US$370.7m • EBIT US$86.0m1 • Higher value differentiated products Asia Pacific manufacturing facilities 1 Net Sales and EBIT equal to YTD as at 31 December 2013 annualised. EBIT excludes New Zealand product liability
Slide 16: Asia Pacific Fibre Cement - Examples
ASIA PACIFIC FIBRE CEMENT - EXAMPLES Ceilings and partitions Exterior cladding Philippines Australia Australia Interior walls New Zealand General purpose flooring 16
Slide 17: Capital Management Framework
CAPITAL MANAGEMENT FRAMEWORK Objectives • To optimize JHX capital structure with a view towards a target net debt position in the range of 1-2 times Adjusted EBITDA1 Strategy • While reinvesting in R&D and capacity expansion required for growth; • Provide consistent dividend payments with the payout
Slide 18: Capital Management and Dividends
CAPITAL MANAGEMENT AND DIVIDENDS Dividends In February 2014 the company announced a 125 year anniversary special dividend of US28.0 cents per security in recognition of the company's 125 year anniversary Declared in US currency and will be paid on 30 May 2014 with a record date of 21 March 2014 Effe
Slide 19: Group Outlook
GROUP OUTLOOK USA and Europe Fibre Cement • The US operating environment continues to reflect an increasing number of housing starts • The company is continuing with its plan to expand production capacity through new capital investments and re-commissioning of idled facilities in future periods • Fu
Slide 20: FY2014 Guidance
FY2014 GUIDANCE • Management notes the range of analysts’ forecasts for net operating profit excluding asbestos for the year ending 31 March 2014 is between US$189 million and US$202 million 1 • Management expects full year earnings excluding asbestos, asset impairments, ASIC expenses, New Zealand p
Slide 21: Summary
SUMMARY • We have a strong, well-established, growth-focused, strong cash-generating and high return business • We have a sustainable competitive advantage • Our model for strong growth is based on: Large market opportunity Superior value proposition Proprietary and/or protected technology Ongoing c
Slide 22: Appendix
® James Hardie —_?; APPENDIX
Slide 23: Global Strategy: Industry Leadership and Profitable Growth
GLOBAL STRATEGY Industry leadership and profitable growth • Aggressively grow demand for our products in targeted market segments • Grow our overall market position while defending our share in existing market segments • Introduce differentiated products to deliver a sustainable competitive advantag
Slide 24: Total US Housing Starts
(Thousands of Starts) 8 eS @) James Hardie U.S. Housing Starts Calendar Quarters 38% en L | Ab xv Ab ct 8 0 s Gs db oe Housing starts —--%Growth (same QtrPY) 60% 24
Slide 25: Key Ratios
KEY RATIOS 9 Months 9 Months 9 Months FY2014 FY2013 FY2012 EPS (Diluted) 1 34c 25c 25c EBIT/Sales (EBIT Margin) 2 17.5% 14.5% 16.5% US & Europe EBIT/Sales (EBIT Margin) 3 21.4% 17.5% 15.3% Gearing Ratio 1 (13.4)% (13.9)% (2.0)% Net Interest Expense Cover 2 63.0x 43.6x 25.9x Net Interest Paid Cover 2
Slide 26: USA and Europe Fibre Cement 5 Year Results Overview
USA AND EUROPE FIBRE CEMENT 5 YEAR RESULTS OVERVIEW FY09 FY10 FY11 FY12 FY13 Net Sales 929 828 814 862 951 US$m Sales Volume 1,527 1,304 1,248 1,332 1,489 mmsf Average Price 608 632 648 642 627 2 US$ per msf EBIT US$m 1 199 209 160 163 163 EBIT Margin % 1 21 25 20 19 17 1 Excludes asset impairment c
Slide 27: Asia Pacific Fibre Cement 5 Year Results Overview
ASIA PACIFIC FIBRE CEMENT 5 YEAR RESULTS OVERVIEW FY09 FY10 FY11 FY12 FY13 Net Sales 273 297 353 376 370 US$m Sales Volume 391 390 408 392 394 mmsf Average Price 871 886 906 906 901 US$ per msf 2 1 EBIT US$m 47 59 79 86 75 1 EBIT Margin % 17 20 23 23 20 1Excludes New Zealand product liability expens
Slide 28: Financial Summary
FINANCIAL SUMMARY 9 Months 9 Months US$ Millions Q3 '14 Q3 '13 % Change FY 2014 FY 2013 % Change Net Sales USA and Europe Fibre Cement $ 262.6 $ 224.5 17 $ 839.4 $ 714.6 17 Asia Pacific Fibre Cement 90.6 95.9 (6) 278.0 279.9 (1) Total Net Sales $ 353.2 $ 320.4 10 $ 1,117.4 $ 994.5 12 EBIT - US$ Mill
Slide 29: Endnotes
ENDNOTES This Management Presentation forms part of a package of information about the company's results. It should be read in conjunction with the other parts of this package, including the Management’s Analysis of Results, Media Release and Condensed Consolidated Financial Statements Definitions N
Slide 30: Endnotes (Continued)
ENDNOTES (CONTINUED) Financial Measures – US GAAP equivalents This document contains financial statement line item descriptions that are considered to be non-US GAAP, but are consistent with those used by Australian companies. Because the company prepares its consolidated financial statements under
Slide 31: Endnotes (Continued)
ENDNOTES (CONTINUED) EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales Sales Volumes mmsf – million square feet, where a square foot is defined as a standard square foot of 5/16” thickness msf – thousand square feet, where a square foot is defined as a standard square foot of
Slide 32: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES EBIT and EBIT margin excluding asbestos, asset impairments, ASIC expenses and New Zealand product liability – EBIT and EBIT margin excluding asbestos, asset impairments, ASIC expenses and New Zealand product liability are not measures of financial performance under US
Slide 33: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Net operating profit excluding asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments – Net operating profit excluding asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments is no
Slide 34: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Diluted earnings per share excluding asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjustments – Diluted earnings per share excluding asbestos, asset impairments, ASIC expenses, New Zealand product liability and tax adjus
Slide 35: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Effective tax rate excluding asbestos, asset impairments, New Zealand product liability and tax adjustments – Effective tax rate on earnings excluding asbestos, asset impairments, New Zealand product liability and tax adjustments is not a measure of financi
Slide 36: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Adjusted 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 GAAP or as a measure of profitability or liq
Slide 37: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) General corporate costs excluding ASIC expenses, intercompany foreign exchange gain and recovery of RCI legal costs – General corporate costs excluding ASIC expenses, intercompany foreign exchange gain and recovery of RCI legal costs is not a measure of fin
Slide 38: Non-US GAAP Financial Measures (Continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Selling, general and administrative expenses excluding New Zealand product liability – Selling, general and administrative expenses excluding New Zealand product liability is not a measure of financial performance under US GAAP and should not be considered
Slide 39: Investor Presentation
INVESTOR PRESENTATION March 2014
James Hardie Industries — Investor Presentation (March 2014) on 6ix