James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q2 FY2016 Earnings Presentation
48 slides from James Hardie Industries's earnings presentation, Jan 13, 2016
Slide 1: Investor Presentation January 2016
Exhibit 99.1 Exhibit 99.12016 INVESTOR JANUARY PRESENTATION
Slide 2: Disclaimer
This DISCLAIMER to in facts Examples projections asbestos-related expectations competition statements new other consumer PAGE thehome oral Management are financing, Securities 2statements forward-looking confidence. of construction concerning regarding about oflaw regarding about concerning forward-
Slide 3: Disclaimer (continued)
DISCLAIMER Words similar statements Forward-looking involve other “Risk products company’s and with domicile the possible limitations company statements. obligation PAGEcompany’s cost and achievements Factors” 3such expressions inherent inability of that changes from operates; cautions to and on fin
Slide 4: Agenda
Global AGENDA USA Asia Capital In Appendix Guidance document. measures (“million US tax second PAGE this rate GAAP Pacific &4Investor Strategy quarter Management on Europe square asThe financial earnings”, explained Fiber of company Presentation, Fiber and feet” the Cement measures Business Framewor
Slide 5: Global Strategy
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 3,178 S&P/ASX NYSE Market 30 PAGE September assets employees 6ADR cash cap capitalization net100 in sales US$5.08b US$1.9b generation listing FOCUSED North 2015 company US$1.8b annualised. America, as (approx) atCOMPANY 11 December Asia Total Pacific assets 20
Slide 7: Group Overview: Quarter and Half Year FY16 Results
GROUP US$65.3M US$95.3M 21.2% Adjusted 2nd US15cents Net Half US$85.5M Dividends PAGEOperating Qtr Year 71.9 Half OVERVIEW Net EBIT Diluted pts declared Flat 12% 151% Year Operating 21.1% Cash Margin US29cents US$128.8M US$185.0M EPSper Flow 2.9 –%share. Profit 2nd pts12% QUARTER 12% 18% Excludes Au
Slide 8: Key Themes: 2nd Quarter and Half Year FY16 Results
KEYyear Higher Improved Half PAGE 25% THEMES 8average volumes USA plant and net performance –in2ND all sales Europe businesses, QUARTER prices Fiber trend inCement but local sustained & PDG HALF currencies segment inYEAR our US EBIT FY16 business margin RESULTS tracked of 25.6% below above ourour ta
Slide 9: World Leader in Fiber Cement
WORLD 2,269 Employees¹ 909 Research Manufacturing Net EBIT Asia ²1USA PAGE KEY EBIT AllSales inPacific & and percentages ²in Asia 9–Europe USA excludes Europe & LEADER Pacific Development 20% 19% and FacilitiesGeographic 80% 81% are Europe research IN asFIBER at 30 and September CEMENT development,
Slide 10: Creating a Sustainable Differentiated Advantage
CREATING Research US$31.7m James Siding History 7th 6th 5TH 4TH 3RD 2ND 1ST ENGNEERED MODIFIED FIBER-CEMENT COLORPLUS SURFACE SUBSTRATE PRIMER Hardie Products of&Fiber spent Development: A SUSTAINABLE ADDED THICKNESS Cement ADHESION onFOR COMPOSITION TECHNOLOGY Research SUBSTRATE CLIMATETM Substrate
Slide 11: Driving Market Share Gains in North America
DRIVING North 7% Fiber 21% 28% 12% Wood 35/90 Grow JHX Currently: ¹Source: PAGE18% wins Cement fiber America Plan (including 11Internal 7%~90% CATEGORY cement Vinyl External of estimates engineered share the fiber Cladding AND tobased 35% cement wood) MARKET of on Share¹ the Stucco category, NAHB ex
Slide 12: Delivering Superior Product Performance
DELIVERING Fiber Fire Hail Resists Lasting Dimensional Can PAGE resistant be resistant cement Cement 12 repainted warping buckling color stability isVinyl SUPERIOR moreEngineered durablePRODUCT than Wood wood PERFORMANCE and engineered wood, looks and performs better than vinyl, and is more cost eff
Slide 13: Building a Portfolio of Products and Brands
BUILDING Primary Trim U.S. Asia Brand PAGE & Pacific / Portfolio Commercial 13 Europe Products A PORTFOLIO Interior Walls OF PRODUCTS / Soffit Backerboard AND BRANDS Siding Flooring Fascia Exteriors Ceilings
Slide 14: USA and Europe Fiber Cement Segment
USA Tacoma, Reno, Pulaski, TX Plant Largest 292,269 HY Net ¹EBIT (US$) PAGE Production manufacturing research Cleburne, FY16 Sales AND Plant City, US$178.9m Margin employees NV 14 fiber VA WA US$698.9m HY Peru, and FL Locations EUROPE Fontana, was cement 25.6% TX FY15 development IL plants¹ suspende
Slide 15: Aggressively Growing Demand for Our Products
AGGRESSIVELY USA Top $3,000 ’05 JH PAGE 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 0100 Volume ’06 Line Fiber 2,800 15 ’07 Growth1 Cement Housing ’08 2,600 ’092,400 GROWING ’10 Starts ’11 2,200 JH ’12Revenue 2,000 ’13 DEMAND ’14 1,800 ’15 Revenue FOR 1,600OUR 1,400 (US$M) PRODUCTS 1,200
Slide 16: Achieving the Right Value for Our Products
ACHIEVING USA 710 685 670 FY10 550 590 630 Impact PAGE US$ Average 675 652 per and FY11 16 of648 MSF Europe price FY12 642 Net THE increases Sales 632 Fiber FY13 RIGHT 626 Price Cement FY14 offset VALUE FY15 by US FOR 1H’16 currency OUR appreciation PRODUCTSin 1H’16
Slide 17: USA and Europe Quarterly EBIT: Delivering Strong Returns
USA Quarterly 30 100 EBIT FY11 1We PAGE Excludes 25 expect 90 AND Margin US$M FY12 20 17 8015 EBIT 70 EBIT EUROPE: asset 10 FY13 605and 50 impairment margins 0 FY14 40 EBIT DELIVERING 30FY15 for 20 Margin1 charges fiscal 10FY16 0 year of EBIT STRONG US$14.3 2016 EBIT/Sales to be RETURNS million towa
Slide 18: Asia Pacific Fiber Cement Segment
ASIA Asia 15909 HY Net EBIT Manila PAGE manufacturing research FY16 Sales employees Pacific A$55.3m Margin PACIFIC 18 Brisbane A$239.0m HY and Plant (A$) FY15 development A$48.9m FIBER plants Sydney Locations 23.2% A$215.6m across CEMENT AucklandEBIT 23.1% facility Australia, SEGMENT New and EBIT Ze
Slide 19: Asia Pacific: Delivering Strong Returns
ASIA Asia Average 1020 A$1,006 FY10 EBIT 130 PAGE EBIT 25Pacific 1000 US$m EBIT Margin 20 PACIFIC: FY11 19 and Net 15980 EBIT Margin 10 FY12 Fiber Sales 5960 DELIVERING 0margin Cement FY13 Price 940 920 Quarterly FY14 excludes Segment 900FY15 STRONG 880 EBIT New 860 1H’16 FY16 Zealand and 840 RETURN
Slide 20: Targeting the Right Product into the Right Market
TARGETING Asia Ceilings Exterior General PAGE Australia Pacific 20purpose cladding and Core partitions THE flooring Markets RIGHT Philippines PRODUCTInterior INTO walls THENew RIGHT Zealand MARKET
Slide 21: Financial Management Supporting Growth
FINANCIAL 1S Management cash Strong Investment-grade 2transparency management Investing Allocation expansion Maintain growth the Flexibility Accretive inorganic Withstand Consider 3shareholder appropriate Conservative Funding sheet EBITDA Closure unsecured facility December replaced 5loan 38% facili
Slide 22: FY2016 Guidance
FY2016 US$250 remaining Management US PAGE GAAP 22million GUIDANCE stable financial expects cautions assuming, andmeasure an full that average year although among due Adjusted USD/AUD toother uncertainty US housing net things, operating exchange housing regarding activity profit rate conditions has
Slide 23: Appendix
James Hardie APPENDIX
Slide 24: U.S. Marketplace
U.S. MARKETPLACE (i sames Hardie IF
Slide 25: Australia & New Zealand Marketplace
AUSTRALIA PAGE 25 & NEW ZEALAND MARKETPLACE
Slide 26: Financial Summary
FINANCIAL Three US$ Total EBIT—US$ USA Asia Research General Net Other 21Adjusted PAGE Asia Excludes Sales interest Millions Pacific and Net (expense) Months 26 Pacific Corporate2 EBIT income net Europe & Sales Asbestos expense Development Fiber Millions operating SUMMARY Q2’16 Fiber and $income Fib
Slide 27: Key Ratios
KEY Half 1H’16 EPS EBIT/ Gearing 321Net PAGE Excludes Interest Debt (Diluted)1 Year RATIOS Sales 27 1H’15 Ratio1 Payback3 Ended asbestos Expense Paid (EBIT 1H’14 33.1% (US 30 Cover2 margin)2 1.7yrs September adjustments, adjustments Cents) Cover2 21.5% 15.5x 1.1yrs— 29c 14.8x 21.1% (9.5)% 200.7x 26c
Slide 28: USA and Europe Fiber Cement Segment Year Results Overview
USASales FY11 Net Sales US$m Average mmsf US$ EBIT 1Excludes 2During segments products cement average PAGE per AND Volume US$m¹ Margin FY12 28 business, net msf Price the has to 814 asset EUROPE sales exclude FY13 second been ²160 %¹ 1,248 862 648 impairment 20 price. which 163 increasing, FY14 951
Slide 29: Asia Pacific Fiber Cement Segment Year Results Overview
ASIA FY11 Net Sales US$m Average mmsf A$ EBIT 1During segments products cement average 2Excludes PAGEper Sales Volume US$m2 Margin FY12 PACIFIC 29 msf1 business, net Price the has to 353 New sales exclude FY13 second been %2 408 79 376 906 FIBER Zealand 86 price. which 23 increasing, 392 FY14 370 90
Slide 30: Results: Half Year
RESULTS Half US$ EBIT profit 21operating Net Gross Improved Lower SG&A Investing Adjusted 25% Increase Higher million US$5.8 PAGE Excludes operating sales Year Millions EBIT 245.6 190.2 profit 30 input expenses volume average recognized stock gross million innet EBIT 878.5 increased in profit Ended
Slide 31: US Quarterly Input Costs
US Quarterly 1,200 Q2’13 PULP 10 Cement, Electricity The Pulp Cement Gas 1Electric PAGE Prior 9INPUT price information prices –8– Prices 1,000 Cost GAS 731 Q3’13 Cost corresponding –prices 6Gas of US Cost Relative 5prices down per COSTS ELECTRIC per 4800 NBSK and Input Q4’13 3are thousand per ton 26
Slide 32: Segment Summary: Quarter and Half Year
SEGMENT 150 178.9 200 100 126.7 67.3 60 50 49.9 30 40 23.9 0F 10 20 21A$ USA Quarter respectively Primarily Asia costs EBIT 8% Increase by PAGE Y14 Excludes 55.4 45.3 27.7 production Millions and 142.8 89.4 74.8 1H Pacific and in FY15 3230.0 11%, and EBIT local reflects Q2 Europe 1H driven Australia
Slide 33: Segment Summary: Research and Development and Corporate Costs
SEGMENT US$ Research (11.6) (6.8) (5.5) 1H (25) (20) (11.2) (15) (10) 0F (5) R&D On Fluctuations number General Results Stock 1Realized PAGE Y14 Excludes EBIT strategy (13.6) (23.6) (18.1) (8.6) Millions (6.0) Q2 summary compensation FY15 (12.0) Q2 33 for of Corporate corporate EBIT foreign and (10.
Slide 34: Changes in AUD/USD Exchange Rate
CHANGES AUD/USD 30 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 As US$ Net Gross 21Adjusted PAGE As Reflects Sep Reported Sales Millions Reported Profit 34 13net EBIT 878.5 31 the Exchange IN 322.6 Excluding operating Dec 1H’16 difference 1H’16 AUD 185.0 857.2 13 291.1 1H’15 31 vs. figures 156.3 Rat
Slide 35: Income Tax
INCOME Three Millions Operating Asbestos Asbestos: NZ before 26.2% (ETR) Adjusted increased earnings Canada, Income Europe losses. 1deductions PAGE Includes weathertightness Months 35 taxes for estimated Australian (excluding tax taxes New of net effective income adjustments1 due TAX the profit Asbe
Slide 36: Cash Flow
US$ CASHFLOW Adjustment Annual Operating Other Cash Capital Acquisition Dividends Share 4321Free Net prior Unfavorable unfavorable partially inventory Completion project, expansion Lower Decrease facilities Increase PAGE Accounts Certain Excludes Includes Income proceeds income Cash Millions corresp
Slide 37: Liquidity and Debt Profile
LIQUIDITY Debt 2FY16 Strong US$500 US$325 unsecured US$507.0 Net EBITDA We PAGE covenants Original remain leverage Debt Maturity FY17 37 balance million excluding within million notes1,2 issue inFY18 PROFILE of compliance Profile sheet: 1.24x discount 8of target year net FY19 bank asbestos debt at $
Slide 38: Asbestos Claims Data
ASBESTOS Three Q2’16 Actuarial Difference actuarial Claims Mesothelioma Average 21Decrease an PAGE Average This impact Months actuarial 38 Q2’15 received claim estimate in estimate on claim inaverage CLAIMS the claims Change and claims settlement1 settlement estimate 157 during settlement average 8f
Slide 39: Definitions and Other Terms
DEFINITIONS This Media Non-financial Definitions AFFA AICF NBSK Legacy certification PAGE Management –Asbestos –Amended 39 Release –Northern NewofZealand Terms plans, and AND Injuries Bleached and Presentation Consolidated inadequate weathertightness OTHER Restated Compensation Soft TERMS forms Fina
Slide 40: Definitions and Other Terms
DEFINITIONS This Financial financial Management’s Operating Consolidated Cost Selling, Asbestos Sum Other Income Net *- Represents interest operating sales income document ofincome interest goods (loss) tax general statement adjustments Measures Statements profit (expense) income (loss) Statements (
Slide 41: Definitions and Other Terms
DEFINITIONS EBIT Sales Financial thickness Gearing Net debt PAGE employed interest payback Volumes margin 41Ratio Ratios expense ––Net –Net mmsf EBIT ANDdebt debt cover –million margin OTHER (cash) (cash) –EBIT issquare TERMS divided defined divided divided feet, by as bycash by EBIT where netnet de
Slide 42: Non-US GAAP Financial Measures
NON-US US measures performance Management US$ Q2’16 EBIT Asbestos Asbestos: AICF New Net Adjusted PAGEGAAP sales Millions Zealand $SG&A 42 Q2’15 161.1 EBIT adjustments $to GAAP and 450.2 provide of uses expenses weathertightness 1H’16 Three $should and 95.3 margin its 145.6 FINANCIAL $these ongoing
Slide 43: Non-US GAAP Financial Measures
NON-US be an Management US$ Q2’16 Net Asbestos: AICF New Asbestos Adjusted PAGE considered alternative operating Millions Zealand SG&A interest 43 Q2’15 net adjustments and GAAPoperating uses expenses other weathertightness 1H’16 Three method profit expense to be FINANCIAL this tax more $Months 1H’1
Slide 44: Non-US GAAP Financial Measures
NON-US and provide ongoing Three Q2’16 (US$ Weighted outstanding—Diluted Adjusted (US PAGEshould cents) millions) Months 44 Q2’15 investors operations. net diluted GAAP average 15 not operating 1H’16 15 and beearnings FINANCIAL 29 with considered common Half Management 26 1H’15 (millions) an profit
Slide 45: Non-US GAAP Financial Measures
NON-US measure effective assessing GAAP US$ Q2’16 Operating Asbestos: AICF New taxes Income Asbestos Effective Adjusted PAGE Millions Zealand $interest SG&A 45 Q2’15 measures 88.2 tax of tax operating income effective adjustments and tax its GAAP profit financial expense $operating rate, rate expens
Slide 46: Non-US GAAP Financial Measures
NON-US or profitability EBITDA core US$ Q2’16 EBIT Depreciation Adjusted PAGE more business Millions $46 Q2’15 161.1 meaningful because EBITDA GAAP orand operations 1H’16 Three $liquidity. 145.6 FINANCIAL amortization it$may –believes than, Months 1H’15 is$not 178.7 not 245.6 Not toincome a$satisfy
Slide 47: Non-US GAAP Financial Measures
NON-US financial expenses. results condition US$ Q2’16 New Excluding: AICF Net Selling, as Adjusted administrative percentage PAGE a sales percentage Millions Zealand SG&A 47 Q2’15 ingeneral performance selling, $aand GAAP Management of manner 450.2 expenses weathertightness 1H’16 Three net results
Slide 48: Investor Presentation January 2016
INVESTOR2016 JANUARY PRESENTATION
James Hardie Industries — Q2 FY2016 Earnings Presentation on 6ix