James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — GSJBW Conference - London (September 2009)
29 slides from James Hardie Industries's conference presentation, Sep 10, 2009
Slide 1: Investor Presentation September 2009 - Disclaimer
For personal use only Investor Presentation September 2009 Disclaimer Text goes here This Presentation contains forward-looking statements. We may from time to time make forward-looking statements in our periodic reports filed with or furnished to the United States Securities and Exchange Commission
Slide 2: Agenda
Agenda Text goes here For personal use only Operations, strategy and performance USA and Europe Fibre Cement Asia Pacific Fibre Cement Organisational focus Financial history Corporate issues Summary In this Management Presentation, James Hardie may present financial measures, sales vol
Slide 3: James Hardie: a growth focused company
James Text goesHardie: here a growth focused company For personal use only Annual net sales US$1.2b Total assets US$1.9b Operations in North America, Asia Pacific and Europe 2,300 employees Market cap US$2.49b S&P/ASX 100 company NYSE listing Note: Net sales and total assets are at 31
Slide 4: First to develop fibre cement; Global strategy
Firstgoes Text to develop here fibre cement For personal use only James Hardie pioneered the development of fibre cement technology in the 1980s Fire Fire Resistant Resistant Moisture Superior Hail Resistant Resistant Durability Termite Termite Proof Proof 7 Global Text goesstrategy here Industry le
Slide 5: Business portfolio
Business Text portfolio goes here For personal use only 120% 100% 80% 60% 82% 77% 80% 82% 81% 40% 20% 18% 23% 19% 0% 20% Assets* Sales EBIT USA and Europe Fibre Cement Asia-Pacific Fibre Cement (Established High Growth/High Return ) (Established High Return) At and for the ended ended 31 March 2009
Slide 6: USA – brief history
USAgoes Text andhere Europe Fibre Cement – brief history For personal use only 1990 – 1995 Entered US in 1990 to manufacture and market roofing shakes (one line, one plant) Shifted target market from roofing to siding Moved to high throughput, low unit cost manufacturing strategy Revenue gro
Slide 7: USA – brief history continued; Sustainable competitive advantage
USAgoes Text andhere Europe Fibre Cement – a brief history continued For personal use only 2006 – present The business focus turn to: Sustaining earnings in a low demand environment Ensuring output matches demand Building Repair and Remodel into a core business Maintaining product leadership
Slide 8: USA – revenue growth streams and sales mix
USAgoes Text andhere Europe Fibre Cement – revenue growth streams For personal use only Exterior products Siding Soffit Fascia Trim Interior products ¼ inch backerboard Hardiebacker 500® Total net sales compound annual growth rate of 17% for interior products and 4% for exterior products
Slide 9: Exterior products – US siding market
Exterior Text products – US siding market goes here For personal use only Large growth opportunity Other OSB 6% FC 3% Hardboard 12% 3% Brick 8% Wood 20% Stone 7% Stucco 8% Estimated fibre cement terminal share 35% Vinyl 33% Sources: NAHB Builder Practices and Consumer Practices Report – 2008 Siding
Slide 10: Superior product performance
Superior Text product performance goes here For personal use only Fibre cement is more durable than wood and engineered wood, and looks and performs better than vinyl Fibre cement Vinyl Engineered wood ! Fire resistant ? ? ! Hail resistant ? ? ! Resists warping ? ? ! Resists buckling ? ? ! Colour la
Slide 11: Interior products – continued
Interior Text goesproducts here – continued For personal use only Attributes Protection against moisture damage and mould growth (total wet area solution) Strength Highest compressive and flexural strength available Workability Cleaner and less abrasive than glass mesh Low density formul
Slide 12: Largest fibre cement producer in North America
Lowgoes Text costhere fibre cement producer For personal use only (US$/SF) PRODUCTION CAPACITY PER LINE CAPITAL COST PER UNIT OF CAPACITY 350.1 0.4 3001 300.1 0.35 250.1 0.3 200 $US / SF MMSF 200.1 0.25 150 150.1 100 0.2 100.1 60 0.15 50.1 0.1 0.1 1990 1994 1998 2001 2006 FY91 FY96 FY97 FY98 FY99 FY
Slide 13: Asia Pacific Fibre Cement
Asiagoes Text Pacific here Fibre Cement For personal use only Five manufacturing plants in Asia Pacific FY09 net sales US$52.6m FY09 EBIT US$6.7m Higher value differentiated products Lower delivered cost Shift to growth model Philippines focus on profitability 25 Agenda Text goes here
Slide 14: Organisational focus – Product leadership
Organisational Text goes here focus For personal use only Product leadership Continued investment in new product development and commercialisation Value-added, differentiated products Benefits: Grow the fibre cement category Grow revenue Sustain good margins Defend and strengthen our c
Slide 15: Organisational focus – ColorPlus Model
Organisational Text goes here focus – ColorPlus® Model For personal use only Higher quality products with higher revenue stream Strategy designed to reduce ‘on the wall’ cost and close gap with vinyl siding Supply of pre-painted exterior products Reduce supply chain costs Installer educati
Slide 16: Organisational focus – HardieZone System
Organisational Text goes here focus – HardieZone™ System For personal use only Our finest siding ever Engineered for Climate™ Highest protection from the elements Sustained beauty with less maintenance Higher customer satisfaction Differentiation from generic fibre cement Seven strategic
Slide 17: Changing US product mix; Total Housing Starts – NAHB
Organisational Text goes here focus – continued For personal use only Changing US product mix Product mix will evolve significantly in the medium term to continue to drive revenue and leverage market position Today Tomorrow ColorPlus Next Generation HardieZone HardiePlank Hardieplank/ ColorPlus Cemp
Slide 18: Response to US housing downturn
Response Text goes hereto US housing downturn For personal use only Focus on primary demand growth and cost management Business re-sets in late 2006/early 2007; in April 2008; and in November 2008: production re-scheduled to balance supply and demand production suspended at Blandon PA, Summe
Slide 19: USA – Primary Growth Performance and Net Selling Price
USA Text and goes Europe Fibre Cement here For personal use only Primary Growth Performance 30% 20% 10% 0% Q104 Q204 Q304 Q404 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 -10% -20% -30% -40% %JHBP Growth (sdft) NC/R&R Growth Rolling 4Qtr -
Slide 20: USA – EBIT and EBIT Margin
USA Text and goes Europe Fibre Cement here For personal use only EBIT and EBIT Margin* 140 35 120 30 100 25 80 20 EBIT MARGIN % EBIT US$M 60 15 40 10 20 5 0 0 FY04 Q1 FY05 Q1 FY06 Q1 FY07 Q1 FY08 Q1 FY09 Q1 FY10 EBIT EBIT/Sales * Excludes impairment charges of US$45.6 million in Q4 FY08 39 Agenda Te
Slide 21: Long term financial targets; Q1 FY10 results overview
Longgoes term 1 Text herefinancial targets For personal use only Actual Actual Actual Actual Actual Actual FY09 FY08 FY07 FY06 FY05 FY04 Revenue Growth (18)% (5)% 4% 23% 23% 25% EBIT Margin* 14% 20% 22% 21% 19% 18% Return on Capital Employed* 17% 25% 28% 32% 27% 23% 1Long term targets exclude asbest
Slide 22: Q1 FY10 – results overview continued; Outlook
Q1 FY10 Text – results overview continued goes here For personal use only 1st Quarter Key Points Sales down due to weaker market Sales volumes were lower across all regions ColorPlus® again increased as a percentage of our product mix Earnings benefitted from lower costs, particularly for pu
Slide 23: Q1 FY10 – Key Ratios
Q1 FY10 Text – results overview continued goes here For personal use only Key Ratios Q1’ FY10 FY09 FY08 EPS (Diluted)1 9.6c 22.3c 38.1c Dividend Paid per share N/A 8.0c 27.0c Return on Shareholders’ Funds1 17.8% 11.2% 17.7% Return on Capital Employed2 23.6% 16.7% 24.2% EBIT/ Sales (EBIT margin)2 22.
Slide 24: Corporate issues
Corporate Text issues goes here For personal use only Current status Asbestos compensation agreement – negotiated 2004 – 2006, resolved early 2007 Australian tax issue – FY 2002-2006, resolved 2008 IRS – 2006 – 2007, resolved 2009 ASIC proceedings – decision on exoneration, penalties and cos
Slide 25: Summary
Summary Text goes here For personal use only We have a strong, well established, growth focused and high return business We have a sustainable competitive advantage Our model for strong growth is based on: Large market opportunity Superior value proposition Proprietary and/or protected t
Slide 26: Definitions – Financial Ratios and Non-US GAAP Measures
Text goes here For personal use only Financial Ratios Gearing Ratio – Net debt (cash) divided by net debt (cash) plus shareholders’ equity. Net interest expense cover – EBIT divided by net interest expense. Net interest paid cover – EBIT divided by cash paid during the period for interest, net of am
Slide 27: Non-US GAAP Financial Measures (continued)
Text goes here For personal use only Non-US GAAP Financial Measures (continued) Net operating profit excluding asbestos, ASIC expenses and tax adjustments – Net operating profit excluding asbestos, ASIC expenses and tax adjustments is not a measure of financial performance under US GAAP and should n
Slide 28: Non-US GAAP Financial Measures – effective tax rate
Text goes here For personal use only Non-US GAAP Financial Measures (continued) Effective tax rate excluding asbestos and tax adjustments – Effective tax rate excluding asbestos and tax adjustments is not a measure of financial performance under US GAAP and should not be considered to be more meanin
Slide 29: Non-US GAAP – General corporate costs
Text goes here For personal use only Non-US GAAP Financial Measures (continued) General corporate costs excluding domicile change related costs – General corporate costs excluding domicile change related costs is not a measure of financial performance under US GAAP and should not be considered to be
James Hardie Industries — GSJBW Conference - London (September 2009) on 6ix