James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (September 2015)
35 slides from James Hardie Industries's investor presentation, Sep 10, 2015
Slide 1: Financial and Market Dynamics September 2015
Financial and Market Dynamics September 2015 Exhibit 99.4
Slide 2: Disclaimer: Forward-Looking Statements
DISCLAIMER FORWARD-LOOKING STATEMENTS This Investor 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, on Forms
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: U.S. Marketplace
U.S. MARKETPLACE Page 4
Slide 5: Economy Has Stabilized
ECONOMY HAS STABILIZED Overall economy has stabilized and is in a slow but steady recovery Page 5 Source: Bureau of Economic Analysis Source: U.S. Bureau of Labor Statistics GDP GROWTH INFLATION -3% -2% -1% 0% 1% 2% 3% 4% 5% 6%
Slide 6: Key Indicators Point to Some Volatility
KEY INDICATORS POINT TO SOME VOLATILITY Oil prices and equity markets have displayed volatility Page 6 Source: World Bank Source: Yahoo! Finance Oil Prices - Price per Barrel ($USD) S&P 500
Slide 7: Employment Supports Homeownership
EMPLOYMENT SUPPORTS HOMEOWNERSHIP Unemployment back to pre-recession rates while wage inflation is starting to emerge Inflation Rates Page 7 $9.40 $9.60 $9.80 $10.00 $10.20 $10.40 $10.60 $10.80 Real Average Hourly Earnings Unemployment Rate - Seasonally Adjusted 0% 2% 4% 6% 8% 10% 12% Source: U.S. B
Slide 8: Confidence
CONFIDENCE Overall consumer confidence and real estate confidence are strong Page 8 Source: OECD August 2015, Confidence Index Real Estate Confidence Index Current Conditions as of June 2015 (50=“Moderate” Conditions) Single-family Townhome Condominium 2008 2009 2010 2011 2012 2013 2014 2015 Overall
Slide 9: Consumer Spend
CONSUMER SPEND Shelter as a % of spend is stable. Total consumer spend is up 5% CAGR since 2006. Page 9 Source: U.S. Bureau of Labor Statistics 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2007 2008 2009 2010 2011 2012 2013 Food Shelter Other Housing Transportation Healthcare Insurance/Pensions
Slide 10: Eligible Home Buyers Exist
ELIGIBLE HOME BUYERS EXIST Pent-up demand continues… ~20% of U.S. population between 20-34. ~30% living at home is historic high. Page 10 Source: U.S. Census Bureau Source: U.S. Census Bureau % of U.S. Population by Age, 2013 Percentage of 18-34 Year-Olds Living with Their Parents
Slide 11: Demand Outpacing Supply
DEMAND OUTPACING SUPPLY Supply is relatively low vs. historical rates Page 11 Source: U.S. Census Bureau Months of Supply at Current Sales Rate Total Number of Households
Slide 12: Financing
FINANCING Minimum FICO score for a mortgage has increased significantly while mortgage rates are low Page 12 Source: Federal Reserve 30-year Mortgage Rate Borrower FICO Score at Origination Sources: CoreLogic Servicing and Urban Institute, April 2015 Note: Purchase-only loans.
Slide 13: Home Ownership Profile
HOME OWNERSHIP PROFILE Home prices are improving as are owners’ financial positions, which should cause home ownership turnover Page 13 Source: S&P Dow Jones Indices Source: Zillow Real Estate Research S&P/Case-Shiller 20-City Composite Home Price Index Percent of Owner-Occupied Homes with a Mortgag
Slide 14: New Construction vs. Existing Home Sales
NEW CONSTRUCTION VS. EXISTING HOME SALES New construction continues to gain momentum as a percent of total home sales Page 14 New Construction as a % of Home Sales Source: National Association of Realtors and U.S. Census Bureau
Slide 15: Millennials
MILLENNIALS Millennials are a source of pent-up demand in the housing sector Page 15 Households 2013 in millions Student Loan Debt Source: JCHS Tabulation of Federal Reserve Board Source: JCHS Tabulation of U.S. Census Bureau
Slide 16: Slow and Steady Recovery
SLOW AND STEADY RECOVERY Starts continue to trend below historic average of 1.5M per year Page 16 HOUSING PERMITS Source: U.S. Census Bureau
Slide 17: Starts Forecast
STARTS FORECAST Starts forecasted to be 1.1M in 2015 and 1.3M in calendar year 2016 Page 17 2016 Forecasted Housing Starts Source: Dodge, Fannie Mae, Freddie Mac and MBA
Slide 18: Multi-Family Outpacing Single-Family
MULTI-FAMILY OUTPACING SINGLE-FAMILY Multi-family starts are growing at a faster rate than single-family starts Page 18 Source: U.S. Census Bureau Housing Starts - unit HOUSING STARTS 000s Homes Housing Starts - or more units 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Slide 19: Multi-Family Trend Likely to Continue
MULTI-FAMILY TREND LIKELY TO CONTINUE Page 19 Housing Affordability Index Source: National Association of Realtors Source: U.S. Census Bureau Today’s younger households are increasingly likely to have characteristics associated with lower homeownership rates Change in share of 25-34 year-old househo
Slide 20: Repair and Remodel Market
REPAIR AND REMODEL MARKET Remodeling continues to be a strong segment of growth 7.8% 13.9% 12.2% 16.2% 19.7% 16.0% 14.4% Page 20 Source: National Association of Home Builders Source: U.S. Census Bureau Average Age = 40 Years Age of Housing Stock NAHB Remodeling Market Index <10 Years 11-20 Years 21-
Slide 21: Repair and Remodel Market
REPAIR AND REMODEL MARKET Repair and Remodel market continues to show strength through the recovery Page 21 Source: Hanley Wood Hanley Wood R&R Siding Project Growth Home Depot and Lowe’s Same Store Comparable Sales Source: Company Filings
Slide 22: JH Performance
JH PERFORMANCE Page 22
Slide 23: Current Market Share Landscape
CURRENT MARKET SHARE LANDSCAPE Page 23 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 followi
Slide 24: Wood-Look Market Landscape
WOOD-LOOK MARKET LANDSCAPE Continued focus on gaining share in the wood-look market Page 24 Past Present Future Source: Internal estimates based on NAHB product usage data adjusted for regional market intelligence
Slide 25: Vinyl Share Continues to Decline
VINYL SHARE CONTINUES TO DECLINE Page 25 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 has continued to steadily decline. • With the wood-loo
Slide 26: Competitive Fiber Cement
COMPETITIVE FIBER CEMENT Though competitors have ample capacity to expand in the fiber cement category, James Hardie continues to maintain its category leadership Page 26 M A A * A N JH JH JH * JH JH JH JH JH JH = James Hardie Plant A = Allura Plant N = Nichiha Plant M = MaxiTile Plant * = Notates I
Slide 27: Group and U.S. & Europe Sales and EBIT Performance
JAMES HARDIE GROUP AND U.S. & EUROPE SALES AND EBIT PERFORMANCE Due to strong operational performance, EBIT growth and margin are in line with expectations Page 27
Slide 28: NOPAT and EPS Performance
NOPAT AND EPS PERFORMANCE NOPAT and EPS Growth continue to increase Page 28
Slide 29: Operational Cash Flow and CapEx
OPERATIONAL CASH FLOW AND CAPEX Investments in NA and APAC capacity during FY15 largely completed. CapEx to return to primarily maintenance levels for FY16 and near term Page 29 FY11 FY12 FY14 FY15 FY13
Slide 30: Capacity – Annual Design
CAPACITY – ANNUAL DESIGN To evaluate capacity, utilization levels, and when incremental capacity will be needed, capacity utilization is determined by using machine hours Page 30 Historically, our disclosed capacity is based on running a standard 5/16 th inch medium standard product: – No accepted i
Slide 31: Capacity – Gross Hours
CAPACITY – GROSS HOURS Active Capacity % Utilization Idle Capacity Actual Machine Hours Total Active Available Hours Capacity Utilization 72% utilization based on gross hours as of 1Q16 Page 31 Capacity Utilization Determined by Machine Hours of Active Capacity Cleburne, Texas Peru, Illinois Plant C
Slide 32: Shareholder Returns
SHAREHOLDER RETURNS 31% average annual Total Shareholder Return since FY10 Page 32
Slide 33: Dividends Paid Per Share
DIVIDENDS PAID PER SHARE Remain committed to Ordinary Dividend within the Defined Payout Ratio Page 33
Slide 34: Summary
SUMMARY Page 34 • U.S. housing market continues modest recovery, albeit at a historically slower pace • FY2016 continues to be in line with our guidance provided at the August Q1 FY16 result call, including the assumptions and discussion of: • Volume and PDG • Average Selling Price and Sales • Margi
Slide 35: Questions
QUESTIONS Page 35
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