James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (November 2003)
32 slides from James Hardie Industries's investor presentation, Nov 18, 2003
Slide 1: High Growth From Unique Technology
7) James Hardie High Growth From Unique Technology November 2003
Slide 2: Focussed on Fibre Cement
@) James Hardie Focussed on Fibre Cement Attractive Investment Attributes ® High growth = Unique proprietary technology = Sustainable competitive advantage ® Strong cashflows and balance sheet = Low cyclical risk =» Relentless will to win
Slide 3: Develop Fibre Cement
Develop Fibre Cement James Hardie pioneered the development of fibre cement technology in the 1980s Fibre Cement Cellulose Fibre Portland Cement
Slide 4: Many Product Applications
@) James Hardie Many Product Applications External siding/soffit lining x |nternal wall/floor wet area lining x Trim and fascia «Ceiling lining and flooring » External/internal wall systems = Partitioning =» Commercial facades = Decorative columns » Fencing » Drainage pipes
Slide 5: Unique Technology and Scale
@) James Hardie Unique Technology and Scale Sustainable Competitive Advantage # Unique plant engineering and proprietary process technology and product formulations s Superior capital cost efficiency — plant capital cost less than %% that of competitors « Largest, lowest cost manufacturer — plant op
Slide 6: Creating the Future
@) James Hardie Creating the Future R&D is a Key Driver of Growth «Capabilities and resources 120 scientists, engineers and technicians 30% increase in spend to US$21 million in F¥Y03 — 3% of sales = Core projects new proprietary engineered raw materials new proprietary product formulations new engi
Slide 7: Strategy
@) James Hardie Strategy Industry Leadership and Profitable Growth « Aggressively grow the market # Secure differentiated position « Generate strong top line growth # Win high shares of large segments « Sustain attractive margins
Slide 8: Balanced Growth Portfolio
Balanced Growth Portfolio James Hardie Business Portfolio — FY 03 GCE Sales EBIT' USA — Established high growth/high 10% 15% 89% return Asia Pacific — Established high return 21% 24% 17% Other — Emerging opportunities 9% 1% (6%) (Pipes, Roofing, Europe, Chile) Total 100% 100% 100%
Slide 9: USA Fibre Cement
@) James Hardie USA Fibre Cement James Hardie is the largest lowest cost producer of fibre cement in the USA Plant Capacity Plant Locations Flat Sheet Capacity Plants (mmsf) Fontana, California 180 Summerville, South 190 Carolina Sacramento, California 300* Flat Sheet Total 2,790 FRC Pipe Plant Pian
Slide 10: Increased Scale
@) James Hardie Cn vee sc Increased Scale Production Capacity Per Line mmsf 7 7 Po Ge Le Bye oe Le 10
Slide 11: L y sa
L y sa 11
Slide 12: Superior Product Performance
Superior Product Performance Fibre Cement is more durable than wood and engineered wood Superior Fi n ibre Cement Durability Engineered Wood v Moisture Resistant ? v Fire Resistant ? Weather Resistant 7? Termite Proof ? 4 Won't Warp ? Ze Won't Crack ? v Won't Rot ? “ Holds PaintLonger ? “ Won'tDelam
Slide 13: Superior Product Performance
; @ James Hardie Superior Product Performance Fibre Cement looks and performs better than vinyl Fibre Cement vw Fire Resistant ? Hail Resistant Wind Resistant Won't Warp Won't Buckle Colour Lasts Longer Vinyl we * Strong and Rigid Expands/Contracts Withstands Impact Dimensional Stability Won't Blist
Slide 14: Growth Dimension
; (@) James Hardie wey Growth Dimension Siding Growth Soffit Growth Retail Growth Z Zz 1997 1998 1999 2000 2001 2002 2003 2002 200: 1/4” Hardibacker Growth A” Hardibacker Growth Fyoo FYet Fyo2 FYO3 FY97 FY98 FYSa FYOO0 FYo1 FYO2 FYO03 Fyo7 FY98 FY99 ~FYOO FYO1 FY02 FYO3 14
Slide 15: Mix Is Driving Price
@) James Hardie Mix Is Driving Price Higher priced differentiated products are driving USS/MSF average price growth 5007 4807 4607 4405 4205 4007 380 r FY99 FYOO FY01 FY0Q2 FY03 HY04 15
Slide 16: Revenue Growth Outstrips Volume Growth
(wssn) aNNSAaY Q QoQ QoQ Q QoQ Q Q OQ Qo i=) Oo QO ite} Ww wT ioe) N vo Qo 3 9) 2 0) a = a = il a = a 8 to y - : a a 01 ye @ 00 inuing outstrip Volume Growth — oS 98 99 a 7 . ed c 6) Oo co He OE ® = ie | f° Fok 3 is | eS oc 7 | ( 2 | ; = Z 3 16004 14004 12005 10005 8004 6004 4004 2007 F (4S) SINTIOA
Slide 17: USA Fibre Cement vs USA Housing Starts
@) James Hardie ns, USA Fibre Cement vs USA Housing Starts 2000 5 7 $800 1800 4 4+ $700 1600 4 $600 _ 1400 4 - ge B — 5 12004 $500 g £3 w 2 = 1000 4 L $400 2 3¢ > 3 & 800 J cs Volume al $300 Q = = = Starts 800 4 umuunans Revenue + $200 400 4 200 4 $100 ) $0 2 S te a = Mar 91 Mar 92 Mar 93 Mar 94 Mar
Slide 18: Updated Market Data
@) James Hardie Updated Market Data Market Size Product Category (bsf) Previous Updated Change New Construction - Siding, Fascia & Soffits 3.5 5.9 2.4 - Trim 1.3 12 (0.1) “TotalNew 48 7 230” “Repair & Remodel a - Siding, Fascia & Soffits 3.9 45 0.6 - Trim 1.6 0.9 (0.7) ‘TotalR&R 5.4 54 - Grand Total
Slide 19: Exteriors on track to more than double
@) James Hardie eee | Exteriors on track to more than double 02- 07 Market Size JH Volume Market Share % (bsf) {bsf) 15| ? 15 Markel Size remeron 9 10 +10 -1 54 +5 0 7 0 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 19
Slide 20: Exteriors on track to more than double
@) James Hardie | Exteriors on track to more than double 02- 07 Market Size JH Volume @ Market Share % (bsf) 2 (bsf} we 15 “ 15 10 +10 -1 54 +5 0 : 0 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 20
Slide 21: Exteriors on track to more than double
@) James Hardie Exteriors on track to more than double 02- 07 Market Size JH Volume Market Share % (bsf) 2 {bsf) 154 -15 aes get 10 +10 -4 Market Share 54 +5 0 7 0 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 21
Slide 22: Backer Board Updated Estimate 2007
: @ James Hardie Backer Cou Updated Estimate 2007 USA Interior Cement USA Interior Cement Board Board Market 0.97bsf Market 1.1bsf James / Hardie 27% | James Hardie 40% Note -- This information is based cn the latest market survey data collected and analysed by James Hardie and is based on source ma
Slide 23: Higher value differentiated products
@) James Hardie Higher value differentiated products Lower delivered cost Emphasise step change High performance culture Increase revenue and margins 23
Slide 24: Philippines and Asia
z (@) James Hardie Philippines and Asia » Manufacturing plant commissioned 1999 * FY03 sales US$18 million, EBIT' positive « Fibre cement as substitute for plywood = 25% market share domestically « Established low cost regional manufacturing hub = Low GDP per capita is an obstacle for developing a d
Slide 25: Chile and South America
@) James Hardie Chile and South America ® Manufacturing plant commissioned 2001 * Low cost manufacturing, rapid market penetration, high growth ® 23% share of flat sheet market already achieved * Positive EBIT' « Introducing differentiated products
Slide 26: Pipes
@) James Hardie Pipes » USA manufacturing plant commissioned 2001 » Product has advantages over reinforced steel concrete pipes — light, long, strong = Lower cost to make and install = High growth — 20% share » Long term targets » national business » 4-5 manufacturing plants = large share of US$2 bi
Slide 27: Roofing
Roofing USA market entry Development of fibre cement roofing technology US roofing market 13 bsf (US siding market 10.2 bsf) Initial target market 2.1 bsf ® to compete with wood shake ® superior durability and fire performance US$12m pilot plant commissioned @) James Hardie 27
Slide 28: Europe
@) James Hardie Europe * Initially pursuing a low cost, low risk strategy « Differentiated products imported from US # G2 Backer ® XLD Trim ® ColorPlus Siding » Focussed market development UK and France = JH business model differentiated from current industry approach 28
Slide 29: Long Term Financial Targets
@) James Hardie Long Term Financial Targets High Growth and Attractive Returns Targeted Target Actual FY03 Actual HY04 Revenue Growth > 15% p.a. 32% 24% EBIT Margins’ > 15% 16% 19% ROA > 15% 21% 22% 29
Slide 30: Disclaimer
@) James Hardie Disclaimer This presentation contains forward-looking statements. Words such as "believe," “anticipate,” “plan,” "expect," “intend,” "target," “estimate,” “project,” “predict,” "forecast," "guideline," "should," "aim" and similar expressions are intended to identify forward-looking s
Slide 31: Notes
@) James Hardie Notes 1, EBIT is defined as operating income. EBIT margin is delined as EBIT as a percentage of our net sales. We believe EBIT and EBIT margin to be relevant and useful information as these are the primary measures used by our management to measure the operating profit or loss of our
Slide 32: High Growth From Unique Technology
7) James Hardie High Growth From Unique Technology November 2003
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