James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Day (June 2018)
39 slides from James Hardie Industries's investor day presentation, Jun 26, 2018
Slide 1: James Hardie Australia – Asia Pacific Investor and Analyst Tour
Exhibit 99.3 James Hardie Australia John Arneil, Country Manager Asia Pacific Investor and Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 2: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities and Exchange Commission,
Slide 3: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (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 i
Slide 4: Agenda
AGENDA 1. AU Strategy 2. JH performance relative to the market 3. Market performance 4. How does JH outperform? PAGE 4
Slide 5: AU Strategy
AU Strategy VISION: To transform the Australian way to build APPROACH: 1. Zero Harm : Accelerating our safety journey 2. Market Led : We are customer and consumer insights led with a unique go to market model 3. Innovative Solutions : Delivery of market valued systems and solutions 4. World class ma
Slide 6: Zero Harm at the core of our strategy
Zero Harm at the core of our strategy Safe People Safe Places Safe Systems • Everyone at JH is a Safety • 5S and housekeepingvisibly • Safety integrated into every Leader demonstrates ZeroHarm function across the business • Every employee in the • Engineering controls are business is empowered imple
Slide 7: Zero Harm is our number one priority – 5S example
Zero Harm is our number one priority – 5S example 5S providing the platform for SAFE Plant, and standardised operations PAGE 7
Slide 8: James Hardie continues to beat the cycle
James Hardie continues to beat the cycle… Indexed Movement: JH Volumes v Market (FY14 Base Yr). Percentage shown is CAGR 1.35 1.30 1.25 1.20 1.15 1.10 Indexed Movement Indexed 1.05 1.00 0.95 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 JH Volumes Detached & MD Starts A&A Bricks Source: ABS, JHX internal
Slide 9: And deliver on financial objectives
And deliver on financial objectives Strong Australian Revenue growth Driving International Segment results Revenue FY16 FY17 FY18 Net Sales (US$m) 379 412 462 Sales Volume (mmsf) 481 487 529 FY2015 FY2016 FY2017 FY2018 EBIT (US$m) 78 95 108 Strong Australian EBIT growth EBIT Margin % 21 23 24 EBIT F
Slide 10: The housing cycle is starting to turn
The housing cycle is starting to turn 1. Residential starts down but above long term average 3. Lending conditions have tightened Annual Starts 250,000 200,000 YoY 150,000 DT: -3% MD: -4% 100,000 HR: -18% 50,000 Total: -8% - Detached Medium Density High Rise Total starts L/T ave Detached starts L/T
Slide 11: But population growth, building approvals and pipeline remain strong
But population growth, building approvals and pipeline remain strong 1. Strong population growth is driving fundamentals 3. Pipeline is excellent, particularly in Eastern States Annual Population Growth - AUS Value of Pipeline ($M)- Detached & Medium Density 450,000 2.0% 25,000 400,000 Value of 20,0
Slide 12: James Hardie sales come from A&A, detached & medium density segments
James Hardie sales come from A&A, detached & medium density segments – less exposed to extreme variability We have a strong weighting in A&A, detached and MD JH Segment Exposure A&A Detached Medium Density Other PAGE 12
Slide 13: How James Hardie outperforms the market
How James Hardie outperforms the market Distribution via Differentiated Industry best Increased on unrivalled Growth Sustainable Insights products and demand the wall channel focused tools growth systems generation coverage network Independent Channels PAGE 13
Slide 14: Turning insights into action
Turning insights into action DRIVING DEMAND VIA BUILDER SEGMENTATON & PARTNERING WITH CHANNEL “LOOK” JOURNEYS Industry leading understanding of Identified & marketing the two Expanding our primary demand how builders chose where to shop, unique FC looks which model to reach and convert the converted
Slide 15: EPIC path to purchase
EPIC path to purchase ENVY POSSIBILITY INVESTIGATE COMMITMENT INSPIRE PEOPLE TO WANT THE LOOK GIVE THE PERSON DOING THE JOB MAKE IT EASY Scyon (Hamptons & Mixed) & HardieDeck CONFIDENCE Category Growth/ Brick Switch Out Education & tools Education , incentives & tools via Channel Consumers, Designer
Slide 16: Holistic marketing
Holistic marketing Leveraging all direct and co-marketing funds via builders and channel to drive holistic support Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 16 The
Slide 17: Aggressive New Product Development through the Innovation Lab model
We continue to deliver aggressive New Product Development (NPD) growth through our leading Innovation Lab model We are led by market We continue to drive a and customer insights culture of innovation to deliver via world-leading differentiated products innovation and services programmes We deliver e
Slide 18: We drive growth throughout the product lifecycle curve
We drive growth throughout the product lifecycle curve Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 18
Slide 19: Differentiated products & systems: walls
We have differentiated products & systems: walls Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 19
Slide 20: Differentiated products & systems: ceilings & linings
We have differentiated products & systems: ceilings & linings Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 20
Slide 21: Differentiated products & systems: floors
We have differentiated products & systems: floors Scyon™ Secura™ interior flooring Scyon™ Secura™ exterior flooring Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 21
Slide 22: Differentiated products & systems: decking
We have differentiated products & systems: decking Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 22
Slide 23: Differentiated products & systems: Hardie Smart
We have differentiated products & systems: Hardie Smart Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 23
Slide 24: Smart, driven and real people driving demand
We have smart, driven and real people driving demand Sales Force Enablement: A strategic, collaborative discipline designed to increase sales results by leveraging intellectual property to provide consistent, scalable enablement services that allow customer-facing professionals and their managers to
Slide 25: Wide channel distribution serving all end user segments
We have wide channel distribution enabling us to serve all end user segments Unequalled distribution across all channels Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 25
Slide 26: Opportunity to continue growing FC in the detached segment
There is opportunity to continue growing FC in the detached segment Materials Share - Detached Homes FC has a strong value proposition relative to brick, in particular Brick Veneer (Timber Frame Construction) brick veneer. Double Brick The data shows there is still a Light Weight Materials big oppor
Slide 27: FC value proposition relative to bricks: consumer demand
FC has a compelling value proposition relative to bricks 1. 64% of consumers are demanding an FC look, as per our survey results Consumer survey: cladding preference (JH insights, n = 6574 June 2018) 10% Bricks Hamptons/Coastal 26% 44% 20% Hamptons/Coastal Modern mixed materials Plain render Brick D
Slide 28: FC value proposition relative to bricks: greater space
FC has a compelling value proposition relative to bricks 2. Fibre cement provides the consumer with greater space - at a time where lot sizes are decreasing Source: HIA Source: JHA Analysis Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wa
Slide 29: FC value proposition relative to bricks: quicker and cheaper
FC has a compelling value proposition relative to bricks 3. Fibre cement is QUICKER and CHEAPER to build with Speed of construction: JH vs Brick Cost of construction: JH vs Brick 60 140 50 120 100 40 80 30 60 $per/m2 m2/per day m2/per 20 40 10 20 0 0 Face Scyon Stria™ Scyon Axon™ Face Scyon Stria™ S
Slide 30: FC value proposition relative to bricks: labour pool
FC has a compelling value proposition relative to bricks 4. There is a large pool of labour to construct with fibre cement relative to brick related trades Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems G
Slide 31: The Australian landscape used to look like this…
The Australian landscape used to look like this… Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 31
Slide 32: But we are shaping it to look like this…
But we are shaping it to look like this… Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 32
Slide 33: But we are shaping it to look like this…
But we are shaping it to look like this… Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 33
Slide 34: But we are shaping it to look like this…
But we are shaping it to look like this… Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 34
Slide 35: Our manufacturing strategy aligns with our organisational objectives
Our manufacturing strategy aligns with our organisational objectives Deliver on Promise - Quality - DIFOT Organisational Capability - Safety first -People -Hardie Advantage Asset Lowest cost Utilisation -Maximise yield - Maximise - Eliminate waste availability & activity - Minimise input costs - Min
Slide 36: Manufacturing costs coming down
Manufacturing costs coming down Manufacturing costs are being driven down Cost of Goods Manufactured (per STDM) by: • Carole Park facility continuing to come up the curve in conjunction with consistent Rosehill performance • Hardie Advantage operating system implementation leading to increased stand
Slide 37: Carole Park phase 2: increasing capacity for the longer term
Carole Park phase 2: increasing capacity for the longer term Four Strategic Concepts: • Capacity to service local market growth and penetration • Support and expand product leadership strategy and capability • Minimizes business risk • Drive low cost manufacturing PAGE 37
Slide 38: Summary
Summary James Hardie is committed to “transforming the Australian way to build” using the below approach: Zero Harm : Accelerating our safety journey Market Led : We are customer and consumer insights led with a unique go to market model Innovative Solutions : Delivery of market valued systems and s
Slide 39: Questions
(@) sames Hardie QUESTIONS