James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Corporate Update (September 2016)
21 slides from James Hardie Industries's corporate update, Sep 15, 2016
Slide 1: Market and capacity update
Market and capacity update Matthew Marsh September 2016 Exhibit 99.3
Slide 2: Economy and housing sector stabilizing
Economy and housing sector stabilizing Source: Bureau of Economic Analysis Residential Fixed Investment as a % of GDP Source: JCHS tabulations of BEA, National Income and Product Accounts GDP Growth Overall economy remains stable and housing is in slow but steady recovery
Slide 3: Though some volatility remains
Though some volatility remains Commodity prices and equity markets have displayed volatility Source: World Bank S&P 500 Energy Commodity Pricing ($USD) Source: Yahoo Finance Oil and Coal Prices ($ USD) Natural Gas Prices ($ USD)
Slide 4: Housing confidence remains strong
Housing confidence remains strong Consumer and real estate confidence remain strong Source: OECD August 2016, Confidence Index Overall Consumer Confidence Real Estate Confidence Index Current Conditions as of June 2016 (50=“Moderate” Conditions) Source: Report on the June 2016 Survey, National Assoc
Slide 5: The eligible homebuyer exists
The eligible homebuyer exists Source: U.S. Census Bureau Source: U.S. Census Bureau % of U.S. Population by Age, 2015 Percentage of 18-34 Year-Olds Living with Their Parents Millennial pent-up demand continues… ~20% of U.S. population between 20-34. ~30% living at home is historic high.
Slide 6: Homebuyer challenges
Homebuyer challenges Households with Little or No Wealth Source: JCHS Tabulation of US Federal Reserve Board of Governors, Survey of Consumer Finances Borrower FICO Score at Origination Sources: CoreLogic Servicing and Urban Institute, May 2016. Note: Purchase-only loans. % of Households Challenges
Slide 7: Housing recovery slow but steady
HOUSING RECOVERY SLOW BUT STEADY Housing Starts 2017 Forecasted Housing Starts 1,500 2,500 ee Housing Starts. ———YoY Growth 3400 80% on 1,300 40% 1,200 ox 1,100 1,000 900 60% 800 Dodge foie cae MBA Starts continue to trend below historic average of 1.5M per year. Starts forecasted to be 1.2M in 2016
Slide 8: New construction dynamics
New construction dynamics Source: U.S. Census Bureau Housing Starts 000s Homes Average Annual Growth – Rent vs. Own (Millions of Households) Source: JCHS tabulations of US Census Housing Vacancy Surveys Multi-Family has outpaced Single-Family during the previous 5+ years, consistent with the shift t
Slide 9: Repair and remodel dynamics
Repair and remodel dynamics Source: U.S. Census Bureau Age of Housing Stock Source: Hanley Wood Hanley Wood R&R Siding Project Growth The repair and remodel market continues to be a stable segment of growth Average Age = 41 Years
Slide 10: Market share landscape
Market share landscape North America Siding Market Share Source: Internal estimates based on NAHB product usage data adjusted for regional market intelligence National Association of Homebuilders (NAHB) serves as our main source for market share measurement as it provides the following: Siding used
Slide 11: Wood-look share outlook
Wood-look share outlook Present Future Focus remains on gaining share in the wood-look market
Slide 12: Wood-look share
Wood-look share Source: Internal estimates based on NAHB product usage data adjusted for regional market intelligence US Vinyl Market Share Estimate While vinyl continues to be the volume-leader in siding, market share continues to steadily decline. With the wood-look market maintaining 65-70% marke
Slide 13: Capacity
(@] vames Hardie CAPACITY
Slide 14: Capacity — annual design
CAPACITY — ANNUAL DESIGN . Design Capacity Historically, our disclosed capacity is Plant Location Owned/Leased (mmsf) based on running a standard 5/16!" Cleburne, Texas Owned 466 i a inch medium standard product: Incremental Capacity 200 Becullling isa Owned) 200) — No accepted industry standard exi
Slide 15: Capacity – gross hours
Capacity – gross hours 74% utilization based on total active available hours as of 1Q17 91%
Slide 16: Capacity core concepts
Capacity core concepts Enable 35/90 by ensuring market supply ahead of demand Commission new capacity to optimize network costs Invest in capacity that maximizes value creation Use triggers to serve as leading indicators for capacity expansion CORE CONCEPTS OF MANUFACTURING CAPACITY
Slide 17: Short-term capacity management
Short-term capacity management Active Capacity Running New Line Decision Point ~90% Begin Commissioning Decision Point ~85% Time Demand Capacity Category Utilization Trigger Concept Complexity of capacity add will influence actual trigger point timing Active Not Commissioned Idled & New
Slide 18: Current capacity projects
Current capacity projects Anticipated Commission Design Capacity in mmsf Plant City #4 2Q FY17 300 Cleburne #3 3Q FY17 200 Plant City #3 4Q FY17 100 Summerville 1Q FY18 190 Additional “active” capacity of ~790 mmsf* Plant City Sheet Machine #4 Performance ramp up on target Excellent material yield r
Slide 19: Greenfield capacity concepts
Greenfield capacity concepts Greenfield construction anticipated in 2-3 years Potential locations -Pacific Northwest -Midsouth -Northeast -West Decision drivers -Demand -Proximity to raw materials -Total cost to operate
Slide 20: Greenfield capacity concepts
Greenfield capacity concepts Design new capacity that optimizes returns of the entire network Line location and size determination Product & process capability selection Value engineering and line optimization Current cost estimates for next greenfield site range between $70MM-$120MM Cost to build i
Slide 21: Summary
summary US housing market continues down path of recovery, though at a slower than historical rate. James Hardie remains focused on market position, including share growth in the wood-look category. Capacity core concepts remain guiding principles of investment decision-making.
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