James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Non-Deal Roadshow (September 2011)
143 slides from James Hardie Industries's roadshow presentation, Sep 22, 2011
Slide 1: ColorPlus Supply Chain
ColorPlus Supply Chain Ryan Sullivan
Slide 2: Disclaimer
DISCLAIMER This SEC, Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. James in offering Hardie circulars, may from invitation time to memoranda time make forward-looking and prospectuses, statements in media in releases its pe
Slide 3: Agenda
AGENDA Why Supply Chain is critical to James Hardie Past to current day Supply Chain Supply Chain Strategy and Systems Execution Update Go Forward
Slide 4: Why Supply Chain is critical to James Hardie
Why Supply Chain is critical to James Hardie
Slide 5: Supply Chain Barriers – New Product Growth
SUPPLY CHAIN BARRIERS – NEW PRODUCT GROWTH Barriers limit pace of new James Hardie products adoption Catch-22: channel won’t get behind new products without builder demand; builders reluctant without strong channel support Higher channel margins—partly to cover inventory costs, partly because new pr
Slide 6: Supply Chain Barriers – ColorPlus Growth
SUPPLY CHAIN BARRIERS – COLORPLUS GROWTH Supply Chain Barriers limit growth of ColorPlus Job site waste due to standard supply chain minimum order amounts: can’t return excess or use it on next job as with primed product Very long lead times for non-stocked orders due to order requirements Limited a
Slide 7: Supply Chain Barriers – Market Strategy
SUPPLY CHAIN BARRIERS – MARKET STRATEGY ??James Hardie market strategies are requiring advanced Supply Chains to deliver on customer value proposition and gain access ??Cemplank Strategy??Short lead-time ??Less than Truck Load (LTL) ??Multifamily Strategy??Direct to job site ??Short lead-time ??Less
Slide 8: Supply Chain Barriers – Opportunity
SUPPLY CHAIN BARRIERS – OPPORTUNITY Overcoming these Supply Chain Barriers enables Market share growth Category share growth Increased trim and accessory attachment Increased ColorPlus adoption Faster new product adoption More aligned channel partners
Slide 9: Past to Current Day Supply Chain
Past to Current Day Supply Chain
Slide 10: James Hardie Supply Chain Network – 1990s
JAMES HARDIE SUPPLY CHAIN NETWORK – 1990s
Slide 11: James Hardie Supply Chain Network – 2000s
JAMES HARDIE SUPPLY CHAIN NETWORK – 2000s
Slide 12: James Hardie Supply Chain Network – 2010s
JAMES HARDIE SUPPLY CHAIN NETWORK – 2010s
Slide 13: Future State Supply Chain
FUTURE STATE SUPPLY CHAIN The future Supply Chain of James Hardie will be: Multiple Supply Chains (programs) configured for specific customer and product segments – all aligned around core principles Full market access Low-cost value chain Value added services James Hardie affordability to the marke
Slide 14: James Hardie Supply Chain Network – Future
JAMES HARDIE SUPPLY CHAIN NETWORK—FUTURE JH Plant ColorPlus Freight Reloads VMIs C+ Reloads Retail VMIs
Slide 15: Supply Chain Strategy and Systems
Supply Chain Strategy and Systems
Slide 16: Channel Strategy Objectives
CHANNEL STRATEGY OBJECTIVES Channel Objectives That Support Share Growth Share Growth Full Market Access • Enable Hardie to sell its full range (including trim & soffit, ColorPlus, Artisan, etc.) – Local stocking – Reasonable margins on “specialty” items – Job packs Lowest Cost Value Chain • Bring s
Slide 17: Key Supply Chain Programs
KEY SUPPLY CHAIN PROGRAMS To execute our strategy there are a few key Supply Chain Programs: ColorPlus Job Packs Vendor Managed Inventory (VMI) Less than Truck Load orders (LTL) Channel Interface Systems
Slide 18: What Are Job Packs?
WHAT ARE JOB PACKS? Job packs are to-the-piece orders of ColorPlus, ordered for one house or project, that are assembled by James Hardie and sold and delivered direct to channel partners Job Packs Defined Ordered to the piece—not ordered in full/mid/mini quantities May include any combination of sid
Slide 19: Why Job Packs?
WHY JOB PACKS? Job Packs are an initiative in support of our on-going strategy of product differentiation Since its introduction, ColorPlus has been a critical aspect of our differentiation strategy Market adoption of ColorPlus is slowed by supply chain issues The channel has lacked fast, affordable
Slide 20: Job Pack Impact on Supply Chain
JOB PACK IMPACT ON SUPPLY CHAIN Substantially reduce the amount of ColorPlus product that must be stocked by the channel Provide easy access to the full color and product range Eliminate jobsite waste on non-stocked SKU’s Increase efficiency through the supply chain Reach a broader set of channel pa
Slide 21: Reduced Lead Times
REDUCED LEAD TIMES Our end state ColorPlus Job Pack lead time will be 5-8 business days from order to receipt by dealer Today contractor experienced lead time ranges from three to six weeks ColorPlus Timeline: From Order to Delivery Today vs. with Job Packs DAYS 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Slide 22: Job Site Waste Reduction
JOB SITE WASTE REDUCTION Job packs cut waste by allowing the builder to order exactly what they need as opposed to fixed pallet quantities Amount Saved by Enabling Order to the Piece Number of Times Savings Observed (in Sample of 48 Jobs) $ Saved on the Job Pack
Slide 23: Far Broader Access to Products
FAR BROADER ACCESS TO PRODUCTS Job packs dramatically increase access to non-stocked SKU’s Chicago ColorPlus SKU’s day lead time (stocked by Dealer) day lead time (stocked by Distribution) Formerly 3 week lead times (not stocked)
Slide 24: Job Pack Scope
JOB PACK SCOPE Goal: Shift majority of our ColorPlus Single Family R&R and New Construction volume to Job Packs MF volume through standard process Remaining flows through traditional channel in full pallet / full truck Short lead time service – walk in business Fill-ins – advance service offering by
Slide 25: Supply Chain Flow
SUPPLY CHAIN FLOW Customer Delivery Interface Order Fulfillment Products Distribution / VMI Take Offs Planning and Scheduling Pricing / Quote Transportation Manufacturing Order Invoicing Processing Warehouse Management
Slide 26: Streamline Communication – Customer Portal
STREAMLINE COMMUNICATION – CUSTOMER PORTAL James Hardie central customer communication and service hub Channel Partner JH PORTAL Online Order Entry JH Contact Information Directed Marketing Events (Aggregation…etc.) JH University Order Status, Pricing Programs/Dashboards Technical Documents (MSDS, B
Slide 27: Future State Value Chain – Online Order Entry and Tracking
FUTURE STATE VALUE CHAIN – ONLINE ORDER ENTRY AND TRACKING Target Customer Builder Contractor Serious DIY Product Order
Slide 28: Online Order Entry – Project Values
ONLINE ORDER ENTRY – PROJECT VALUES In order to be successful our designed solution must: Be easy to use Deliver validation & guided selling Eliminate biggest causes of errors/holds and minimize others Be flexible to accommodate business changes quickly Provide options to minimize channel effort red
Slide 29: Execution/Results Update
Execution/Results Update
Slide 30: Current Job Pack Markets
CURRENT JOB PACK MARKETS Standard Markets Current Job Pack Markets
Slide 31: Job Pack Adoption
JOB PACK ADOPTION Job Pack Volume Job Packs Total C+ Vol -US only % ColorPlus via Job Packs Job Packs have seen rapid adoption in all markets launched to date
Slide 32: Job Packs – Market Access
JOB PACKS – MARKET ACCESS Florida Market Chicago Market Job Packs continue to gain wider market access
Slide 33: Job Packs – Accessory Attachment Increases
JOB PACKS – ACCESSORY ATTACHMENT INCREASES ColorPlus Trim Attachment Chicago ColorPlus Trim Attachment PNW Job Packs help to increase accessory attachment in low penetration markets
Slide 34: Go Forward
@ sames Hardie
Slide 35: Go Forward
GO FORWARD In the next 12 months we will deliver on a number of key elements: Channel Interface launch – Q4 ColorPlus Manufacturing capability enhancements – Q1 Additional Job Pack markets – on going VMI network expansion – key markets
Slide 36: Current Job Pack Markets
CURRENT JOB PACK MARKETS Standard Markets Current Job Pack Markets Upcoming Job Pack Markets
Slide 37: Summary
Summary
Slide 38: Summary
SUMMARY The James Hardie Supply Chain is developing from a base manufacture model to an advanced value chain to support and drive market initiatives Job Packs continue to expand and grow while driving expected value in the market Continued development and investment will be required for the next few
Slide 39: Questions and Answers
Questions and Answers
Slide 40: Channel Strategy & Management
Channel Strategy & Management Robb Rugg
Slide 41: Disclaimer
DISCLAIMER SEC, This Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. James in offering Hardie circulars, may from invitation time to memoranda time make forward-looking and prospectuses, statements in media in releases its pe
Slide 42: Agenda
AGENDA Channel Strategy Review Channel Objectives Distribution Review & Approach Dealer Approach
Slide 43: Channel Strategy Review
CHANNEL STRATEGY REVIEW We are reviewing and adjusting (where necessary) our channel strategy. Goal: greater alignment with our four channel objectives and greater consistency Why is Hardie Revisiting its Channel Strategy? Ensure our channel approach fully enables JH and our channel partners to prov
Slide 44: Channel Strategy Objectives
CHANNEL STRATEGY OBJECTIVES Four core goals: access, low delivered cost, value-add services and affordability. These four objectives are how the channel partners help JH to achieve market share growth Channel Objectives That Support Market Share Growth Market Share Growth Full Market Access Enable H
Slide 45: Channel Strategy – Distribution
CHANNEL STRATEGY – DISTRIBUTION Driving toward a consistent distribution strategy Each strategy component shaped by the four core objectives Distribution Strategy Primary sales responsibility with James Hardie coordinated with Distribution Partners Dual distribution in all markets Pick best of breed
Slide 46: @ sames Hardie
@ sames Hardie ‘Source: Dodge 8/11 & NAHB Builder dnd! Corisunier Practice Reports “09 (8/10)
Slide 47: Population Density
y ef eo al POPULATION DENSITY
Slide 48: Summary
SUMMARY Mapped out U.S. based on starts and population Pure Non-Metro or Metro exception vs. the rule Base case Distribution Model is mature Metro with supplemental Non-Metro component for added function(s) Increasing James Hardie sales involvement with dealers coordinated and complimentary with Dis
Slide 49: Dealer Approach
Dealer Approach
Slide 50: Dealer Approach
DEALER APPROACH Continue to drive primary demand with builder, contractor and owners Educate, train and go to market with dealer partners in a planned, complimentary and coordinated manner Cost effectively deliver differentiated product, systems and services to the marketplace
Slide 51: Future State Value Chain – James Hardie Infrastructure
FUTURE STATE VALUE CHAIN – JAMES HARDIE INFRASTRUCTURE Target Customer Builder Contractor Serious DIY BIY Order Product
Slide 52: Strategy Execution Roadmap – Next Five Years
STATEGY EXECUTION ROADMAP – NEXT FIVE YEARS Timeline 0 – 3 Years 3 – 5 Years Easy to do Business with – Build the Infrastructure –Objective “Simplify” “Connect” Deliverables • Customer Service improvement • Online Order Entry platform • Channel Management team • Job Pack capability • Guided Selling
Slide 53: Summary
SUMMARY Channel, both Distribution & Dealers, being viewed and treated as important strategic partners Strategically important to market share growth; provides full market access, low-cost, value-add services and affordability as core objectives Increasing sales resources and infrastructure to suppo
Slide 54: Organization – Channel Focus
ORGANIZATION – CHANNEL FOCUS Building a channel focused sales organization Organization will work with channel partners to develop and implement strategic growth plans Hardie, channel partners and marketplace will get market access, low-cost value chain, value-add services and affordability
Slide 55: Questions and Answers
~ | Questions and Answers
Slide 56: Product Strategy
Product North Strategy Sean Gadd
Slide 57: Disclaimer
DISCLAIMER SEC, This Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. James in offering Hardie circulars, may from invitation time to memoranda time make forward-looking and prospectuses, statements in media in releases its pe
Slide 58: Agenda
AGENDA What is the 3-product strategy Why the 3-product strategy is important Market opportunity Market approach Results Go forward
Slide 59: What Is the Product Strategy
WHAT IS THE 3 PRODUCT STRATEGY As the leader in Fiber Cement, with our product leadership position and advances in technology, we position James Hardie as the superior exterior solution for cladding to builders, contractor and developers HZ5 markets in the North and Canada Delivering on our brand pr
Slide 60: Products – HardiePlank HZ5 Lap Siding with Improved Drip Edge
PRODUCTS – HARDIEPLANK HZ5 LAP SIDING WITH IMPROVED DRIP EDGE Superior moisture shedding Clean lines More durable edge
Slide 61: Products – HardieTrim NT3 Boards
PRODUCTS – HARDIETRIM NT3 BOARDS Concealed fasteners virtually eliminates touchup speeds up installation 12’ Lengths (5/4” and 4/4”) reduces seams reduces waste Back groove reduces weight increases strength
Slide 62: Products – New HardieShingle Siding
PRODUCTS – NEW HARDIESHINGLE® SIDING Authentic wood shingle appearance New tab dimensions 5 different widths Reduces waste Improved pattern variation 2 different panel types New texture More authentic look Available ColorPlus individual shingles
Slide 63: Complete James Hardie ColorPlus Exterior
COMPLETE JAMES HARDIE COLORPLUS EXTERIOR Complete range of products with ColorPlus® Technology. Low maintenance Same maintenance cycle Single source limited warranty protection
Slide 64: Why the Product Strategy Is Important
WHY THE 3 PRODUCT STRATEGY IS IMPORTANT Delivers on James Hardie’s brand promise, creating more value along the value chain Fortifies the ColorPlus™ value proposition – removes the need for the painter at the site and delivers a superior finish Re-invigorates our HZ5 messaging to the entire supply c
Slide 65: Northern Market Opportunity
NORTHERN MARKET OPPORTUNITY Large opportunity 300 million sqft between shingle and trim billion sqft of siding Trim and shingle penetration sold through the value of color and full wrap in all segments
Slide 66: Competition in the North
COMPETITION IN THE NORTH ONTARIO OSB.Sidin CEC, Vinyl WEBR. OSB Trim STAT Reda | Cedar Stake’ sven |SidingY,Polymer' Shake / PVC Trim
Slide 67: Strategy – Market Approach
STRATEGY – MARKET APPROACH Approach, dependent on market dynamics
Slide 68: Product, Place, Promotion, Price
Ps Product ColorPlus Complete Exterior: Place Delivering positioning through channel step process: 1. Dealer stocking / accepting of supply chain 2. Developing dealer relationships 3. Educating contractors with the dealer 4. Converting contractors with dealers to full wrap ColorPlus exterior Promoti
Slide 69: Execution and Results to Date
EXECUTION AND RESULTS TO DATE Northern HZ5 Markets and Canada Primary focus on large metro markets DC/Baltimore Philadelphia New England Minneapolis Kansas City Began coordinated launch in FY12
Slide 70: Northern Markets – Results
@ sames Hardie NORTHERN MARKETS — RESULTS i : Shingle Attachment ‘Trim Attachment Color Penetration
Slide 71: Go Forward
GO FORWARD Continue our product development strategy Deliver our brand promise to all segments of the market and all price bands Continue to further develop our range of products Creating value all along the value chain
Slide 72: Questions and Answers
Questions and Answers
Slide 73: Repair & Remodel Segment
Repair & Remodel Segment David Donofrio
Slide 74: Disclaimer
DISCLAIMER SEC, This Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. James in offering Hardie circulars, may from invitation time to memoranda time make forward-looking and prospectuses, statements in media in releases its pe
Slide 75: Overview
OVERVIEW Market/Strategy Review James Hardie R&R Execution Update Summary and Go Forward Questions and Answers
Slide 76: Repair & Remodel Market Overview
Repair & Remodel Market Overview
Slide 77: R&R Opportunity Continues to Grow vs New Construction
R&R OPPORTUNITY CONTINUES TO GROW VS NEW CONSTRUCTION
Slide 78: R&R Segment Strategy
R&R SEGMENT STRATEGY Business Strategy – Switch the preference from vinyl to fiber cement by directly communicating the benefits and affordability of James Hardie to the consumer 2/3 of Americans can afford James Hardie when presented with an affordable option Most Americans will choose fiber cement
Slide 79: R&R Strategic Objectives
R&R STRATEGIC OBJECTIVES Objectives Get into home via education, contractor or both PDG ( Market Share ~ 35%) Category Share-90% Shift to Full Wrap- ColorPlus, Trim Outcomes/Challenges James Hardie can impact seller and buyer behavior ColorPlus and trim attachment rates lead business Category Share
Slide 80: R&R Segment Strategy, Objectives and Initiatives
R&R SEGMENT STRATEGY, OBJECTIVES AND INITIATIVES Homeowner Contractor James Hardie influences the decision in the home on both the Buyer (homeowner) side and the Seller (contractor) side
Slide 81: Contractor Landscape
CONTRACTOR LANDSCAPE Breakdown by Sales Revenue $ 10 mm + $ 2.0 – $9.9 mm $ 1.0 – $1.9 mm $750K– $999K $500K– $749K $250K– $499K > $250K Top 24% of contractors: • James Hardie primarily targets the Specialty Contractor while expanding to include influential Full Line Contractors • James Hardie reach
Slide 82: James Hardie R&R Product Targets
JAMES HARDIE R&R PRODUCT TARGETS Market Share with JH direct intervention Top 3rd rd Middle 3 Bottom 3rd Wood/Stone Vinyl Distinct Product Targets in the Expanded Middle Artisan ColorPlus Full Wrap James Hardie Value
Slide 83: Repair & Remodel Progress Update
Repair & Remodel Progress Update
Slide 84: R&R Progress Update
R&R PROGRESS UPDATE James Hardie Organization Creating the Standard Contractor Partnerships James Hardie Siding Center Update
Slide 85: R&R Progress – James Hardie Organisation
R&R PROGRESS – JAMES HARDIE ORGANISATION Continue to build an R&R competency inside our organization – Segment Managers and a dedicated James Hardie Repair and Remodel sales force focusing on the top US market opportunities Field sales focus continues to shift – additional James Hardie rep sale forc
Slide 86: Creating the Standard – Neighbourhood Targeting
CREATING THE STANDARD – NEIGHBOURHOOD TARGETING Original Hot Mapping evolved into a more refined view of the markets
Slide 87: Driving the Standard
DRIVING THE STANDARD Vinyl Hardie Well Established Battleground Vinyl Neighborhood
Slide 88: Neighborhood Map
@ ames Hardie Lake Michigan
Slide 89: Street Level Targeting
STREET LEVEL TARGETING Yard Signage Canvassing (before & after) Direct mail in targeted neighborhoods Door Hangers Letter & pictures to HOA (before, during, and after on progress) Neighborhood “Open House” event Referrals Testimonial letter to HOA from homeowners HOA = Home Owners Association
Slide 90: Street Level Targeting – Continued
STREET LEVEL TARGETING – CONTINUED Neighborhood Events Community Events Open Houses
Slide 91: James Hardie Contractor Partnership Programs
JAMES HARDIE CONTRACTOR PARTNERSHIP PROGRAMS Our Objective is to develop a productive and mutually beneficial partnership with Contractors and Remodelers who want to build a better business and are looking to create a competitive advantage in the marketplace selling James Hardie® Siding. Provide acc
Slide 92: @ sames Hardie
@ sames Hardie In this knockdown competitive industry you need skill and preparation to succeed.
Slide 93: WinWithHardie.com Website Demo
WINWITHHARDIE.COM Website Demo
Slide 94: Why James Hardie?
WHY JAMES HARDIE? • Endorsement on James Hardie’s website • Preferred Remodeler logo & certificate • Direct consumer leads via Request a Quote page • Customized sales, marketing, & lead generation support • Guild Quality customer satisfaction surveying (3rd Party) • Personalized account on salesforc
Slide 95: Why James Hardie? Business Growth Webinar Series
WHY JAMES HARDIE? BUSINESS GROWTH WEBINAR SERIES
Slide 96: R&R Progress – James Hardie Siding Center
R&R PROGRESS – JAMES HARDIE SIDING CENTER years into our learning experience in Denver Learn and understand the repair and remodel segment, how to generate leads, target specific areas and price points as well as understand the buying behaviors of our customers Build credibility with Professional Co
Slide 97: R&R Progress Issues and Challenges
R&R PROGRESS ISSUES AND CHALLENGES Continue to build organizational competency Emphasis on target acquisition and neighborhood segmentation Grow Preferred Remodeler geographic presence Preferred Remodelers as an extension of JH in the home Create a bench of Preferred contractors thru Associate Contr
Slide 98: R&R Progress Issues and Challenges – Continued
R&R PROGRESS ISSUES AND CHALLENGES – CONTINUED Grow & Leverage “Associate” Program Ensure “benefits and affordability” message is carried into the home by Preferreds (boat) and Associates (wake) Leverage successful James Hardie positions with Neighborhood Events
Slide 99: Repair & Remodel Summary and Go Forward
Repair & Remodel Summary and Go Forward
Slide 100: R&R Segment Summary and Go Forward
JAMES HARDIE R&R SEGMENT SUMMARY AND GO FORWARD Original assumptions are valid – JH can and is having an impact in R&R; both the homeowner and contractor are positively impacted when JH is presented as an affordable option Organizational Shift – Dedicated R&R presence in top US opportunity markets –
Slide 101: R&R Segment Summary and Go Forward
JAMES HARDIE R&R SEGMENT SUMMARY AND GO FORWARD Continue to convert the large middle market with Colorplus Full Wrap offering Drive into the upper and lower markets – proper product targeting and early, direct Hardie sales involvement Benefits and affordability message in the home continue to be key
Slide 102: Questions and Answers
Questions and Answers
Slide 103: Non-Metro Segment
Non-Metro Segment David Donofrio
Slide 104: Disclaimer
DISCLAIMER SEC, This Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. James in offering Hardie circulars, may from invitation time to memoranda time make forward-looking and prospectuses, statements in media in releases its pe
Slide 105: Agenda
AGENDA Why Non-Metro Segment Focus Market Execution Mid-South Summary/Go Forward Q&A
Slide 106: Non-Metro vs Metro Map – Original Assumptions
NON-METRO VS METRO MAP – ORIGINAL ASSUMPTIONS Metro Priority Non-Metro (45) Secondary Non-Metro (low opportunity)
Slide 107: Starts Density
STARTS DENSITY Source: Dodge 8/11 & NAHB Builder and Consumer Practice Reports ‘09 (8/10)
Slide 108: Construction Prominent in Non-Metro
SF CONSTRUCTION PROMINENT IN NON-METRO Type SF (%) MF (%) Mobile Average % of home (%) Home Size Housing (sf) cost as a % of income Metro 59% 37% 4% 2,443 22% Non-Metro 78% 7% 15% 2,091 18% Source: US Census Bureau, 2008 & 2010 Characteristics of New Homes Survey
Slide 109: James Hardie Is Underpenetrated in Non-Metro
JAMES HARDIE IS UNDERPENETRATED IN NON-METRO Vinyl & Wood 75% Non-Metro Primary Wall Exterior Other Fiber Cement Vinyl Stucco Wood Brick Source: US Census Bureau, 2010 Characteristics of New Homes Survey
Slide 110: Strategic Objective and Game Plan
STATEGIC OBJECTIVE AND GAME PLAN Strategic Objective Grow what it fiber is in cement their reference penetration metro in market. non-metro markets to be equal to Game Plan construction Build product and awareness R&R segments with home through owners channel for single partners family new Align dev
Slide 111: Non-Metro Strategic Objective
NON-METRO STRATEGIC OBJECTIVE Objectives Provide the consumer 100% market access to full JH product offering Align channel to support and drive market development activities PDG growth to match reference metro market Category share 90% Outcomes/Challenges Fundamentally changed distribution and logis
Slide 112: Non-Metro Market Execution Mid-South
Non-Metro Market Execution Mid-South
Slide 113: Non-Metro Execution
NON-METRO EXECUTION Pilot Program – 2 Regions Mid-South Heavy primed Hardie markets (HZ10) Fragmented dealer base Fragmented builder base Competitive pressure (competitive fiber cement) Small dealer alignment gap Large geography with lots of smaller cities rather than large metros James Hardie diffe
Slide 114: Mid-South Execution
MID-SOUTH EXECUTION Strategic Initiatives Grow share through dealer & builder conversions Fundamentally change our distribution model and realign our distribution network to enable JH growth initiatives in fragmented builder and dealer markets 100% access of full James Hardie product line delivered
Slide 115: Mid-South Non-Metro Product/Segment Strategy
MID-SOUTH NON-METRO PRODUCT/SEGMENT STRATEGY Full Line access to James Hardie family of products ColorPlus available in job pack quantities Cemplank available for the cost conscious builder Prevail available for the multifamily segment Single Family Single Family New Repair & Retail Multi Family Con
Slide 116: Mid-South Execution—Place
MID-SOUTH EXECUTION—PLACE Fundamentally Redesign our Supply Channel Regional Distribution Model Dedicated distribution for specific geographic region Distributor advantaged to service dedicated geography VMI / Color job pack model (full line availability) Dealer Servicing and Training Agreement Deal
Slide 117: Mid-South Execution – Distribution Zones
MID-SOUTH EXECUTION – DISTRIBUTION ZONES
Slide 118: Mid-South Promotion and Price
MID-SOUTH PROMOTION AND PRICE We have expanded James Hardies direct sales presence as well as James Hardie installation support in the Mid-South James Hardie will take direct sales responsibilities to dealers of scale and activities to drive market development with those partners James Hardie and ou
Slide 119: Mid-South Execution Summary
MID-SOUTH EXECUTION SUMMARY Hardie Sales Model Executed Increased Sales and Install presence as well as Sales Manager Currently dealer focused for alignment / transition to market development Standard operating procedure being developed for rep effectiveness Distribution Model Executed Partners in p
Slide 120: Non-Metro Segment Summary and Go Forward
Non-Metro Segment Summary and Go Forward
Slide 121: Summary – Go Forwards
SUMMARY – GO FORWARDS The non-metro markets remain a growth opportunity for James Hardie Better executed Mid-South pilot, continue dealer game plan and transition to market development Re-focus on Mid-West restructure, resourcing ramp, new management in place
Slide 122: Questions and Answers
Questions and Answers
Slide 123: Brand Positioning
Brand Positioning Rob Gilfert
Slide 124: Disclaimer
DISCLAIMER SEC, This Management on Forms 20-F Presentation and 6-K, in contains its annual forward-looking reports to shareholders, statements. in James offering Hardie circulars, may invitation from time memoranda to time make and forward-looking prospectuses, statements in media releases in its pe
Slide 125: Product/Segment Strategy
PRODUCT/SEGMENT STRATEGY Achieving market growth requires us to continue to develop our product strategy to meet the needs of different customer segments Single Family Single Family Manufactured New Repair & Retail Multi Family Housing Construction Remodel
Slide 126: Agenda
AGENDA Win & defend category share with the price- Cemplank conscious builder HardiePlank Defend & grow our premium brand share Innovation with new differentiated products Pilot program to communicate the value of Made For Living a full-wrap James Hardie home
Slide 127: Cemplank
@ sames Hardie
Slide 128: Cemplank Strategy Reset
CEMPLANK STRATEGY RESET Objective: Win back and defend our category share with the price-conscious bottom ~ 1/3 of the market. Core Strategy: Price Cemplank to the dealer at parity to commodity fiber cements and position as a component of a full line, single-vendor product solution. Manage the risk
Slide 129: Choosing Cemplank Markets
CHOOSING CEMPLANK MARKETS Where we sell and do not sell Cemplank is a function of several variables We are more likely to introduce Cemplank to markets that are/have: More mature (high S-Curve) Lower category share Dual-stocking channel Consolidated channel Lower product differentiation
Slide 130: Cemplank Product Positioning and Promotion
CEMPLANK PRODUCT POSITIONING AND PROMOTION We have re-positioned Cemplank as a “Builder Grade” product line designed for new construction starter homes. Cemplank Product Attributes Limited SKU range Siding only, no accessories Generic wood pattern Limited warranty (relative to James Hardie)
Slide 131: Cemplank Pricing and Distribution Strategies
CEMPLANK PRICING AND DISTRIBUTION STRATEGIES We have multiple pricing and distribution ‘design experiments’ in place, all aligned around achieving the following objectives: Sell Cemplank to dealers who primarily sell James Hardie product Match & follow ‘everyday’ commodity fiber cement pricing Ensur
Slide 132: Cemplank Strategy Results
CEMPLANK STRATEGY RESULTS We measure the success of our Cemplank strategy by tracking dealer conversions & buying behaviors, and measuring the volume of siding sold into the channel. Market A Market B
Slide 133: HardiePlank Innovation
HardiePlank Innovation
Slide 134: James Hardie Innovation Path
JAMES HARDIE INNOVATION PATH
Slide 135: Custom Colonial – Texas
CUSTOM COLONIAL – TEXAS In the fall of 2010 we launched a plank differentiation strategy, via a pilot project in Texas Introduced ‘Custom Colonial’ – an upgrade of our existing Colonial product Nail line / branding Improved product shaping Improved pattern alignment Eliminated the Cemplank Colonial
Slide 136: HardiePlank Design Collection
HARDIEPLANK DESIGN COLLECTION In October 2011 we will launch 4 differentiated plank profiles as a HardiePlank Design Collection into select low-differentiation markets where we are running our Cemplank strategy. Our objective is to defend our premium brand share by continuing to move the market pref
Slide 137: Next Generation Plank Innovation
NEXT GENERATION PLANK INNOVATION In 2012 we will introduce step-change innovation across our entire HZ10 plank platform. Our objective is to provide clear differentiation in terms of both aesthetics and performance We are currently evaluating innovation concepts around: Product Design/Shaping Textur
Slide 138: Made For Living (Model Home Marketing)
Made For Living (Model Home Marketing)
Slide 139: Made For Living
MADE FOR LIVING “Made For Living” is a pilot program designed to educate the market on the value of a full-wrap James Hardie home by partnering with influential new home builders Model Home Experience Real Estate Network Consumer Marketing Home Buyer
Slide 140: Model Home Experience
MODEL HOME EXPERIENCE In our Houston pilot, we have partnered with 3 key move-up home builders whose homes are 100% full-wrap premium JH brand products Our brand message is now being communicated to homebuyers through a network of over 100 model homes: Model home merchandising QR code/video technolo
Slide 141: Model Home Experience
MODEL HOME EXPERIENCE
Slide 142: Real Estate Community
REAL ESTATE COMMUNITY By educating and influencing the real estate community, we reach a broader audience with our message and drive traffic back to our partner builders. Since inception we have communicated directly with over 2,000 Houston realtors through: Direct sales/dedicated rep Online James H
Slide 143: Summary
SUMMARY Achieving market growth requires us to continue to develop our product strategy to meet the needs of different customer segments. Cemplank ‘Builder Grade’ for the price-conscious bottom 1/3 of the market Continued innovation of our HardiePlank products to defend and grow our premium brand sh
James Hardie Industries — Non-Deal Roadshow (September 2011) on 6ix