James Hardie Industries Plc. · NYSE:JHX

James Hardie Industries — Investor Presentation (September 2007)

25 slides from James Hardie Industries's investor presentation, Sep 25, 2007

  1. Slide 1: James Hardie September 2007 / A Growth Focused Company

    For personal use only James Hardie September 2007 In this Management Presentation, James Hardie may present the financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures included in the Endnotes section of this document starting on page 45. The company presents fin

  2. Slide 2: Focused on Fibre Cement

    Focused on Fibre Cement For personal use only Investment Attributes ƒ Growth focused ƒ Sustainable competitive advantage ƒ Unique proprietary technology ƒ Strong financial performance, cash flows and balance sheet¹ ƒ Track record of outperforming US housing market ¹ Excluding asbestos related items

  3. Slide 3: Industry Leadership and Profitable Growth

    Industry Leadership and Profitable Growth For personal use only Strategy ƒ Aggressively grow primary demand for fibre cement ƒ Secure differentiated position ƒ Generate strong top line growth ƒ Win high shares of large segments ƒ Sustain attractive margins 5 Business Portfolio 100% 78% 82% 92% 50% 1

  4. Slide 4: Quick history

    USA Fibre Cement – Quick history For personal use only 1990 – 1995 ƒ Entered US in 1990 to manufacture and market roofing shakes (one line, one plant) ƒ Shifted target market from roofing to siding ƒ Moved to high throughput, low unit cost manufacturing strategy ƒ Revenue growth led to investment in

  5. Slide 5: Sustainable Competitive Advantage

    USA Fibre Cement For personal use only Sustainable Competitive Advantage ƒ Unique plant engineering and proprietary process technology and product formulations – significant investment in R&D ƒ Superior capital cost efficiency ƒ Low cost manufacturer ƒ Only national producer of fibre cement in each

  6. Slide 6: Sales Mix / US Siding Market

    USA Fibre Cement – Sales Mix1 For personal use only New Construction vs Repair and Remodel New construction R&R Total sales 61% 39% Exterior products 70% 30% Interior products 30% 70% Exterior vs Interior Products Exterior Interiors Volume 78% 22% Revenue 84% 16% 1 FY07 - Volume 11 Exterior Products

  7. Slide 7: Superior Product Performance

    Superior Product Performance For personal use only Fibre Cement is more durable than wood and engineered wood Fibre Cement Superior Engineered Wood Durability ! Moisture Resistant ? ! Fire Resistant ? ! Weather Resistant ? ! Termite Proof ? ! Resists Warping ? ! Resists Cracking ? ! Resists Rotting

  8. Slide 8: Interior Products

    Interior Products For personal use only Hardiebacker ƒ Net sales growing strongly – CAGR* 23% (FY02-FY07) ƒ Leading position in 1/4” segment Others – technology advantage for floor applications FY 1997 657mmsf ƒ Hardiebacker 500® is driving penetration on wall applications ƒ Greenboard replacement H

  9. Slide 9: Largest Fibre Cement Producer in North America

    Largest Fibre Cement Producer in North America For personal use only Plant Locations JH Plant Design Capacity Flat Sheet Capacity Plants (mmsf) Fontana, California 180 z Tacoma, WA Plant City, Florida 300 Cleburne, Texas 500 Blandon, PA Tacoma, Washington 200 z z Peru, IL Peru, Illinois 560 Waxahach

  10. Slide 10: Divisions

    USA Fibre Cement Divisions For personal use only Organisational Structure West Markets North Markets (incl. AK, HI) (incl. Can) South Markets 2,500 2,000 JHBP USA - Total Business Mix Interiors FY07 Volume = 2.1bsf 1,500 North MMSF West Interiors North 1,000 South 500 0 West FY03 FY04 FY05 FY06 FY07

  11. Slide 11: Divisions (cont.) / ColorPlus Model

    USA Fibre Cement Divisions (cont.) For personal use only Northern Division ƒ Approx. 50% of new housing sales ƒ Accounts for 25% of USA Fibre Cement sales ƒ Penetrating regions where vinyl is dominant siding material ƒ Focus on majority color penetration ƒ Estimated terminal share of 30% 21 ColorPlu

  12. Slide 12: ColorPlus Model (cont.) / Average Net Sales Price

    ColorPlus® Model (cont.) For personal use only ƒ Mechanics of model in place ƒ Colour plant network ƒ 20 colours and 20 products by market ƒ Channel is reset and developing ƒ Base level logistics capability ƒ Value priced ColorPlus® in July 2006 USA Fibre Cement 23 Average Net Sales Price Average pr

  13. Slide 13: Top Line Growth / EBIT and EBIT Margin

    USA Fibre Cement For personal use only Top Line Growth 3,000 JH Volume (mmsf), Starts (000's Units) $1,300 2,600 $1,100 2,200 Revenue (USDM) $900 1,800 $700 1,400 $500 1,000 $300 600 200 $100 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 JH Volume JH Revenue Housing Starts 1 Rolling 12 month

  14. Slide 14: Growth in Revenue Per Employee / US Housing Downturn

    Growth in Revenue Per Employee For personal use only $570 $552 US$ Thousands $495 $413 $381 $367 $354 $329 $326 $298 $251 $250 $166 $153 $115 $48 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 Revenue # of Employees Revenue Per Employee 27 US Housing Downturn ƒ Focus

  15. Slide 15: Market Penetration / Asia Pacific Fibre Cement

    For personal use only Market Penetration USA Fibre Cement 30% 20% 10% 0% Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 -10% -20% -30% %JHBP Growth (sdft) New Construction/Repair & Remodel Growth Rolling 4Qtr - %JHBP Growth (sdft) Rolling 4Qtr – New Construction/Repair & Remodel Gr

  16. Slide 16: Organisational Focus: Product Leadership

    For personal use only Organisational Focus Product Leadership ƒ Continued investment in new product development and commercialisation ƒ Value-added, differentiated products ƒ Benefits: ƒ Grow the fibre cement category ƒ Grow revenue ƒ Sustain good margins ƒ Defend and strengthen our competitive posi

  17. Slide 17: Product Leadership examples

    For personal use only Organisational Focus Product Leadership – examples USA Fibre Cement: ƒ ArtisanTM Lap (thicker siding, provides distinctive shadow lines) ƒ premium product ƒ currently being launched in Atlanta ƒ wider launch in 2008 33 Organisational Focus Product Leadership – examples Asia Pac

  18. Slide 18: Changing US Product Mix / Future Growth

    For personal use only Organisational Focus Changing US Product Mix ƒ Product mix will evolve significantly in the medium term to continue to drive revenue and leverage market position. Today Tomorrow Colorplus Next Generation HardiePlank Hardieplank/ ColorPlus Cemplank Cemplank Fighting Brand 35 Org

  19. Slide 19: Long Term Financial Targets / Q1 FY08 Results Overview

    Long Term Financial Targets For personal use only High Growth and Attractive Returns Targeted Target¹ Actual Actual Actual Actual FY07 FY06 FY05 FY04 Revenue Growth > 15% p.a. 4% 23% 23% 25% EBIT Margin > 15% p.a 22%* 21%* 19%* 18% Return on Capital > 15% p.a 28%* 32%* 27% 23% Employed 1 Long term t

  20. Slide 20: Q1 FY08 – Results Overview

    For personal use only Q1 FY08 – Results Overview Strong operating performance ƒ USA Fibre Cement – improved market penetration, price growth and cost management helped deliver a very strong EBIT result despite further weakness in US housing ƒ Asia Pacific Fibre Cement – both sales and EBIT up despit

  21. Slide 21: Q1 FY08 Asia Pacific / Corporate Issues and Challenges

    Q1 FY08 – Results Overview For personal use only Asia Pacific Fibre Cement Net Sales up 20% to US$71.2 million Sales Volume up 7% to 98.0 mmsf Average Price up 1% to A$873 EBIT up 20% to US$12.4 million EBIT Margin flat 17.4% 41 Corporate Issues and Challenges The company continues to focus on the e

  22. Slide 22: Summary / Disclaimer

    Summary For personal use only ƒ We have a strong, well established, growth focused and high return business ƒ We have a sustainable competitive advantage ƒ Our model for strong growth is based on: ƒ Large market opportunity ƒ Superior value proposition ƒ Proprietary and/or protected technology ƒ Ups

  23. Slide 23: Endnotes

    For personal use only Endnotes This Management Presentation forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including Management’s Analysis of Results, a Media Release and a Financial Report. Definitions Finan

  24. Slide 24: Non-US GAAP Financial Measures

    For personal use only Non-US GAAP Financial Measures EBIT and EBIT margin excluding asbestos – EBIT and EBIT margin excluding asbestos are not measures of financial performance under US GAAP and should not be considered to be more meaningful than EBIT and EBIT margin. James Hardie has included these

  25. Slide 25: Non-US GAAP Financial Measures (continued)

    For personal use only Non-US GAAP Financial Measures (continued) Diluted earnings per share excluding asbestos – Diluted earnings per share excluding asbestos is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than diluted earnings per share. T

James Hardie Industries — Investor Presentation (September 2007) on 6ix