James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q2 FY2015 Earnings Presentation
39 slides from James Hardie Industries's earnings presentation, Feb 3, 2015
Slide 1: Investor Presentation February 2015
Exhibit 99.1 Exhibit 99.1 PRESENTATION INVESTOR FEBRUARY 2015
Slide 2: Disclaimer
This DISCLAIMER written are Examples projections with at expectations statements the provisions property conditions, changes home PAGE any not compensation Investor or the resales, of 2historical materials furnished in suspension and the of and about regarding consumer such ofcompany’s concerning fo
Slide 3: Disclaimer (continued)
DISCLAIMER Words similar statements involve other “Risk products company and with domicile the possible limitations cautions Forward-looking update PAGEcompany’s cost and achievements Factors” 3such any expressions inherent inability of you that changes from operates; and on forward-looking raw asth
Slide 4: Agenda
Global AGENDA USA Asia Capital Group In Appendix company explained square financial earnings”, the PAGE this second Pacific &4Investor Outlook feet” Strategy Management Europe measures presents in “Adjusted quarter or Fiber the“mmsf” Presentation, and Fiber and definitions, financial Cement and (“Ad
Slide 5: Global Strategy: Profitable Growth
GLOBAL Industry Introduce Aggressively PAGE 5 Leadership differentiated STRATEGY grow demand andproducts Profitable for our toGrowth products deliver a in sustainable targeted market competitive segments advantage
Slide 6: A Growth Focused Company
A GROWTH Annual Total Strong Operations 3,140 S&P/ASX NYSE Market PAGE assets employees 6ADR cash cap capitalization net100 in sales US $generation listing FOCUSED US2.0b North company $4.5b $ US1.7+b America, as (approx) atCOMPANY 16 January Asia Pacific 2015.and Total Europe assets as at 30 Septem
Slide 7: Group Overview
GROUP Three Q2’15 Net Adjusted 1Dividends PAGE Dividends operating Months 7Q2’14 OVERVIEW EBIT Net Diluted per declared Operating Change cash and share1 (US$ Margin EPS Half flow millions) per (US 1H’15 (US % Year Profit 34.1 share 19.3 cents) cents) ended 1H’14 175.4(80)% 65.4 85.1 18.5 815 830 56.
Slide 8: Q2'15 and 1H'15 Summary and Key Themes
Q2’15 Group US Higher Improved Investing Continuing 1We PAGE Prior housing continue 8adjusted & net corresponding volumes 1H’15—SUMMARY in plant sales to market organization toinvest expect performance net increased andoperating remains net inperiod(s) our high capacity sales capability, 12% full be
Slide 9: World Leader in Fiber Cement
WORLD MISSION RENO Tacoma PLANT SUMMERVILLE PULASKI PERU CHICAGO CLEBURNE WAXAHACHIE FONTANA HOMG DUBLIN CHRISTCHURCH AUCKLAND SYDNEY BRISBANE MELBOURNE ADELAIDE PERTH MANILA JHX Net Geographic EBIT Asia ²1USA PAGE EBIT AllSales Pacific Manufacturing Sales & and percentages ²9–Europe KONG CITY exclu
Slide 10: Creating Differentiated Products: Research and Development
CREATING Research History James Siding 7th 6th 5th 3rd 2nd 1st THE Product Generic PAGEFIBER-CEMENT ENGINEERED MODIFIED COLORPLUS SUBSTRATE PRIMER JAMES Hardie 10 Products of Generations Fiber-Cement &Fiber Development: AHARDIE ADDED SUSTAINABLE THICKNESS Cement COMPOSITION TECHNOLOGY FOR SUBTRATE I
Slide 11: Delivering Superior Product Performance
DELIVERING Fiber Fire Engineered Vinyl PAGE resistant cement Cement 11 Wood Hail is SUPERIOR more resistant durableResists PRODUCT than wood warping PERFORMANCE andResists engineered buckling wood,Lasting looks color and performs Dimensional betterstability than vinyl, Can and be repainted is more c
Slide 12: Building a Portfolio of Products and Brands
BUILDING Trim Soffit Primary Backerboard Commercial Siding Interior Flooring U.S. Brand Asia PAGE & Pacific / Portfolio Fascia 12 Europe Walls Products A Exteriors /PORTFOLIO Ceilings OF PRODUCTS AND BRANDS
Slide 13: USA and Europe Fiber Cement Segment
USA Tacoma, Waxahachie, Cleburne, Peru, Pulaski, Summerville, Plant Largest 292,100 2Q Net ¹EBIT PAGE Production manufacturing research FY15 Sales AND Plant City, IL US$74.8m Margin employees 13 fiber VA WA 2Q US$335.4m TX and FL Locations EUROPE was TX cement Reno, FY14 22.3% SC development plants¹
Slide 14: Driving Category and Market Share Gains
DRIVING North Masonry Stucco Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 4.7BSF James Vinyl Wood Fiber Source: 35/90 Grow Maintain JHX Currently: Current PAGE wins Cement Competitors fiber America Plan Hardie 14estimate Internal JHX’s ~90% CATEGORY cement Share: Wood-Look External category est
Slide 15: Aggressively Growing Demand for Our Products
AGGRESSIVELY USA Top Volume ‘00 Housing JH Revenue Rolling PAGEVolume Revenue ‘01 Line Fiber 15 ‘02 12 (mmsf) Starts (US$M) Growth month Cement ‘03 ‘04 / Starts average GROWING ‘05 ‘06 (000s of‘07 seasonally Units) ‘08 DEMAND ‘09 ‘10 adjusted FOR ‘11 ‘12 OUR estimate ‘13 PRODUCTS ‘14of housing start
Slide 16: Achieving the Right Value for Our Products
ACHIEVING USA Average 710 FY10 635 US$ 679 PAGE670 per and FY11 16630 MSF Net Europe FY12 590 Sales THE550 Fiber FY13 Price RIGHT Cement FY14 VALUE 1H’15FOR OUR PRODUCTS
Slide 17: Delivering Strong Returns: USA EBIT Margin
USA Quarterly 80 35 FY09 1EBIT PAGE Excludes 70AND 30 US Margin 60 25 FY10 1720 50 $M EBIT EUROPE: asset 40 15 FY11 30 10 and impairment 520 FY12 EBIT 010 DELIVERING 0FY13 Margin1 charges FY14 of FY15 STRONG $ US14.3RETURNS million in 4th quarter FY12, US $5.8 million in 3rd quarter FY13 and $ US11.
Slide 18: Asia Pacific Fiber Cement Segment
ASIA Asia Brisbane Manila Sydney 15985 2Q Net EBIT PAGE manufacturing research FY15 Sales employees Pacific US$25.7m Margin and PACIFIC 18 Auckland (2) 2Q US$105.0m EBIT and Plant FY14 24.5% development FIBER margin plants US$22.1m Locations 23.7% US$93.3m across CEMENT excludes facility Australia,
Slide 19: Asia Pacific: Delivering Strong Returns
ASIA Asia Average Quarterly A 1000 FY10 30 1EBIT PAGE EBIT $25 $959 MSF Pacific 960 US Margin 20 PACIFIC: FY11 19 and Net 15 M$ 920 EBIT EBIT 10 FY12 Fiber Sales 880 5and DELIVERING 0margin Cement 840 FY13 Price EBITFY14 excludes Margin1 Segment Q1 FY15 STRONG FY15 New Zealand Q2RETURNS FY15weathert
Slide 20: Targeting the Right Product into the Right Market
TARGETTING Asia Ceilings Interior Philippines New Exterior General PAGE Australia Pacific Zealand 20walls purpose cladding and Core partitions THE flooring Markets RIGHT PRODUCT INTO THE RIGHT MARKET
Slide 21: Financial Management Supporting Growth
FINANCIAL Strong Investment-grade Disciplined Investing Consider Maintain Liquidity ~$500 2.75 Executing Conservative 123F PAGE inancial year 21 million Financial margins governance ordinary flexibility other weighted management in and strategy Capital R&D leveraging MANAGEMENT Funding of shareholde
Slide 22: Outlook and Guidance
USAUS The Due manufacturing Asia Our FY2015 Management more 1Management PAGEexpectation to Pacific and moderate 22 the housing OUTLOOK Guidance1 Europe slower Fiber expects is capacity level is market unable Fiber then Cement that than AND full expected net Cement through recovery toyear originally
Slide 23: Appendix
(@) vames Hardie APPENDIX
Slide 24: Key Ratios
JHX Half 1H’15 EPS EBIT/ Gearing 21Net PAGE Excludes Interest Debt (Diluted)1 Year KEY Sales 24 1H’14 Ratio1 Payback ended RATIOS asbestos Expense Paid (EBIT 1H’13 21.5%(9.5)%(6.4)% (US 30 Cover2 1.1yrs margin)2 September adjustments, Cents) Cover2 200.7x —26c 96.3x 28.1% 24c 77.9x AICF 66.8x 19c 18
Slide 25: USA and Europe Fiber Cement Year Results Overview
USASales FY10 Net Sales US$m Average mmsf US$ EBIT 1Excludes 2During have methodology sales PAGE per no AND price Volume US$m¹ Margin FY11 25impact msf Price the 828 asset in EUROPE FY12 second ²the provides 209 %¹ 1,304 814 632 on impairment prior 25 160 FY13 862 fiber 648 quarter 1,248 20 FIBER 16
Slide 26: Asia Pacific Fiber Cement Year Results Overview
ASIA FY10 Net Sales US$m Average mmsf A$ EBIT 1Excludes 2During have refined average PAGEper Sales no Volume US$m¹ Margin PACIFIC FY11 26 msf methodology net impact Price the 297 New ²sales FY12 second 59 %¹ 390 353 886 on FIBER Zealand 79 20 price 408 FY13 376 fiber 906 86 quarter 23 provides 392 i
Slide 27: Results for the Quarter
RESULTS Three US$ Research Asbestos EBIT Other Net Summary Gross Partially SG&A Higher Between Interest Income PAGEinterest operating sales Millions 145.6 income Months profit 27 expenses sales average headcount product expense tax offset EBIT adjustments 440.4 increased &FOR expense expense develop
Slide 28: Group Gross Profit
GROSS 160.0 27.0 28.0 29.0 30.0 31.0 32.0 33.0 34.0 35.0 150.9 34.3 111.3 33.3 Q2 Gross Price Production PAGEFY13 FY14 FY15 has 140.0 Margin profit 28PROFIT improved costs 120.0 has (US$M) (%) remained continue — 100.0 asGROUP we80.0 continue to strong increase 60.0throughout 40.0 to in execute 20.0
Slide 29: Income Tax
INCOME Three Q2’15 Operating Asbestos Asbestos: NZ before 23.1% Adjusted Income 1Australian PAGE Includes weathertightness Months 29 taxes Q2’14 estimated tax taxes net effective income adjustment1 TAX profit AICF tax expense operating paid payable are 1H’15 losses and before SG&A adjusted paid not
Slide 30: Cash Flow
(US$ CASHFLOW EBIT Asbestos Annual Depreciation Working Other Cash Capital Dividends Net Free First Inventory Receipt 1$Higher PAGE US380 Includes proceeds Cash half Flow Millions) 196.0 non-cash 30 working capital Expenditures AICF inCapital million related1 cash increase Flow the Asbestos Paid fro
Slide 31: Liquidity and Debt Maturity Profile
LIQUIDITY Debt FY’15 $125 $40 $100 $190 $50 $0 Liquidity Cash Total Drawn Undrawn Fixed Weighted Strong $60.5 $505 37% As Net 1We PAGE Debt of remain Debt liquidity Maturity million US$60.5 Combined Q2’15, million /31 FY’16 balance maturities Facilities Floating within Facilities Profile Average inP
Slide 32: Global Capex Spend and Key Projects
HY FY15 Capital Progress Project Plant Cleburne, Expansion Carole Expected Tacoma, Design PAGE City, 32 Park, of Budget Washington—Land during to Texas—3rd facility GLOBAL Florida—4th iscomplete Queensland—Capacity on 1H’15 track andCAPEX construction assessment sheet sheet machine purchase SPEND ma
Slide 33: USA and Europe Fiber Cement Plant Capacity
USA Plants Cleburne, Peru, Additional Pulaski, Reno, Tacoma, Waxahachie, Fontana, Plant Summerville, ¹Flat PAGE Production Sheet AND Capacity City, suspended Illinois Nevada operating 33Virginia Washington California1 Texas Total Plant Florida capacity EUROPE was Texas 560 South 300 3,726 Capacity 4
Slide 34: US Input Costs
US INPUT Quarterly Input Discussion: We The Pulp Gas Electric Cement PAGEare price cost information ––costs Cost 34 Cost engaged –ofof US Cost Relative are per COSTS gas per NBSK Input up thousand per for ton in underlying significantly effective index thousand industrial Costs –pulp fromcubic is fr
Slide 35: Asbestos: AICF Proforma Cash Flows
ASBESTOS For The Average A$ Contribution Insurance Loan Interest Claims Operating Other AICF On PAGEmillions 15 the higher Repayments 1.5 cash September 35 Data received paid quarter expense, claim recoveries costs and reported (68.0) FUND tosettlement and investments—31 investments—30 AFFA (2.3) du
Slide 36: Definitions and Other Terms
DEFINITIONS This Media Non-financial Definitions ABS AFFA AICF ASIC ATO NBSK Legacy certification PAGE Investor –––36 Release Australian –New Asbestos Australian Amended Northern of Zealand Presentation Terms plans, and AND Injuries Taxation Bureau and Bleached Securities Consolidated inadequate wea
Slide 37: Definitions and Other Terms: Financial Measures
DEFINITIONS Financial This US Management’s Operating Consolidated Cost Selling, Sum Income Net *- PAGE Represents GAAP interest sales income document of37 interest goods tax general Measures profit financial (expense) income (loss) Financial Statements non-U.S. sold Analysis contains expense AND and
Slide 38: Definitions and Other Terms
DEFINITIONS EBIT Sales Financial thickness Gearing establishment (cash) PAGE Volumes margin –38Short-term Ratio Ratios –fees) –mmsf EBIT AND NetNet and debt –margin OTHER million interest long-term (cash) isTERMS square defined paid divided debt cover feet, less as byEBIT –where net cash EBIT debt a
Slide 39: Investor Presentation February 2015
INVESTOR PRESENTATION FEBRUARY 2015
James Hardie Industries — Q2 FY2015 Earnings Presentation on 6ix