James Hardie Industries Plc. · NYSE:JHX

James Hardie Industries — UBS London Conference September 2007

50 slides from James Hardie Industries's conference presentation, Sep 5, 2007

1. Slide 1: UBS London Conference September 2007

   For personal use only UBS London Conference 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 pre

2. Slide 2: A Growth Focused Company

   James Hardie For personal use only A Growth Focused Company ƒ Annual net sales US$1,543m ƒ Total assets US$2,128m ƒ Operations in North America, Asia Pacific and Europe ƒ 3,000 employees ƒ Market cap US$3.1 billion ƒ ASX S&P 100 company ƒ NYSE listing Note: Net sales and total assets are at 31 March

3. Slide 3: 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

4. Slide 4: First to Develop Fibre Cement

   First to Develop Fibre Cement For personal use only James Hardie pioneered development of fibre cement technology in the 1980s Fire Fire Resistant Resistat Superior Hail Moisture Resistant Resistant Durability Termite Proof 4

5. Slide 5: 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

6. Slide 6: Business Portfolio

   Business Portfolio For personal use only 100% 78% 82% 92% 50% 17% 16% 5% 2% 10% -2% -5% Assets* Sales EBIT USA Fibre Cement Asia Pacific Fibre Cement Other (Established High Growth/High Return ) (Established High Return) (Other Potential Growth Opportunities) At and for the fiscal year ended 31 Marc

7. Slide 7: 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

8. Slide 8: Quick history (cont.)

   USA Fibre Cement – Quick history (cont.) For personal use only 2000 – present ƒ A number of cladding competitors exit ƒ Business continued to grow strongly in buoyant housing market ƒ Product leadership strategy helps revenue outstrip volume growth ƒ Business model is proven - continues to be delive

9. Slide 9: 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

10. Slide 10: Revenue Growth Streams

    USA Fibre Cement – Revenue Growth Streams For personal use only Exterior products ƒ Siding ƒ Soffit ƒ Fascia ƒ Trim Interior products ƒ ¼ inch backerboard ƒ Hardiebacker 500® ƒ Total net sales compound annual growth rate of 23% (FY02 – FY07) USA Fibre Cement 10

11. Slide 11: Sales Mix

    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

12. Slide 12: Exterior Products - US Siding Market

    Exterior Products - US Siding Market For personal use only Large Growth Opportunity Plywood Alum./Steel 3% 3% Other 3% Hardboard OSB 3% 1% Mansonry 4% Vinyl Brick 37% est 2007* 10% Fibre Cement 14% (James Hardie) 12% Wood 8% Stucco 14% Estimated James Hardie terminal share 35% * NAHB Sources: •Build

13. Slide 13: 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

14. Slide 14: Superior Product Performance (cont.)

    Superior Product Performance – (cont.) For personal use only Fibre Cement looks and performs better than vinyl Fibre Vinyl Cement ! Fire Resistant ? ! Hail Resistant ? ! Resists Warping ? ! Resists Buckling ? ! Color Lasts Longer ? ! Dimensional Stability ? ! Can Be Repainted ? USA Fibre Cement 14

15. Slide 15: 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

16. Slide 16: Interior Products (cont.)

    Interior Products – (cont.) For personal use only Attributes ƒ Protection against moisture damage and mould growth (total wet area solution) ƒ Strength ƒ Highest compressive and flexural strength available ƒ Workability ƒ Cleaner and less abrasive than glass mesh ƒ Low density formulation – lightest

17. Slide 17: 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

18. Slide 18: Low Cost Fibre Cement Producer

    Low Cost Fibre Cement Producer For personal use only PRODUCTION CAPACITY PER LINE CAPITAL COST PER UNIT OF CAPACITY (US$/SF) 350.1 0.4 300 300.1 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 FY00 FY01 FY02 F

19. Slide 19: Divisions Organisational Structure

    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

20. Slide 20: Divisions - Southern and Western Divisions

    USA Fibre Cement Divisions – (cont.) For personal use only Southern and Western Divisions ƒ High builder penetration ƒ High brand awareness ƒ Primary growth positioned around wood, vinyl, brick and stucco conversions ƒ Expansion into rural markets ƒ Significant opportunity in R&R segment ƒ Increment

21. Slide 21: Divisions - Northern Division

    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

22. Slide 22: ColorPlus Model

    ColorPlus® Model For personal use only ƒ Higher quality products with higher revenue stream ƒ Strategy designed to reduce ‘on the wall’ cost and close gap with vinyl siding ƒ Supply of pre-painted exterior products ƒ Reduce supply chain costs ƒ Installer education ƒ Channel increases revenue base an

23. Slide 23: ColorPlus Model (cont.)

    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

24. Slide 24: Average Net Sales Price

    Average Net Sales Price For personal use only Average price growth driven by mix and price increases 620 600 580 560 540 US$ per MSF 520 500 480 460 440 420 400 380 360 FY02 FY03 FY04 FY05 FY06 FY07 Q1 FY08 USA Fibre Cement 24

25. Slide 25: Top Line Growth

    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

26. Slide 26: EBIT and EBIT Margin

    USA Fibre Cement For personal use only EBIT and EBIT Margin* 140 35 120 30 EBIT MARGIN % 100 25 EBIT US$M 80 20 60 15 40 10 20 5 0 0 FY02 FY03 FY04 FY05 FY06 FY07 Q1 FY08 EBIT EBIT/Sales *Excludes restructuring and other operating expenses of US$12.6 million in Q3 FY02 26

27. Slide 27: Growth in Revenue Per Employee

    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

28. Slide 28: US Housing Downturn

    US Housing Downturn For personal use only ƒ Focus on primary demand growth and cost management ƒ Business Re-set ƒ Re-set late 2006/early 2007 in anticipation of weaker housing market ƒ Included: ƒ Production re-scheduling to balance supply and demand ƒ Sales and marketing activities reviewed and re

29. Slide 29: Market Penetration

    Market Penetration For personal use only 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

30. Slide 30: Asia Pacific Fibre Cement

    Asia Pacific Fibre Cement For personal use only ƒ Manufacturing plants in Australia, New Zealand, Philippines ƒ FY07 net sales US$252m ƒ FY07 EBIT US$39m ƒ Higher value differentiated products ƒ Lower delivered cost ƒ Shift to growth model ƒ Philippines focus on profitability 30

31. Slide 31: Organisational Focus: Product Leadership

    Organisational Focus For personal use only 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

32. Slide 32: Product Leadership - examples

    Organisational Focus For personal use only Product Leadership - examples USA Fibre Cement: ƒ ColorPlus® Collection (pre-painted siding and trim): ƒ Driving growth against vinyl in Northern Division ƒ Launched in Western and Southern Divisions FY07 32

33. Slide 33: Product Leadership - examples

    Organisational Focus For personal use only 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

34. Slide 34: Product Leadership - Asia Pacific Fibre Cement

    Organisational Focus For personal use only Product Leadership – examples Asia Pacific Fibre Cement ƒ ScyonTM range of value-added, differentiated products launched 2007 ScyonTM Trim and ScyonTM LineaTM weatherboards ScyonTM wet area ScyonTM Matrix flooring cladding 34

35. Slide 35: Changing US Product Mix

    Organisational Focus For personal use only 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

36. Slide 36: Future Growth

    Organisational Focus For personal use only USA Fibre Cement – Future Growth ƒ Job 1 ƒ Deliver terminal share in current USA Fibre Cement business ƒ Job 2 ƒ Extend the current business model in the US (eg new products, new markets) ƒ Job 3 ƒ Bolt-on acquisition opportunity in the US? ƒ Technology tra

37. Slide 37: Long Term Financial Targets

    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

38. Slide 38: Q1 FY08 - Results Overview

    Q1 FY08 – Results Overview For personal use only ƒ Strong operating performance despite further weakness in major markets ƒ Net operating profit affected by asbestos (mostly related to stronger A$) Q1 Q1 % US$ Million FY08 FY07 Change Net operating profit 39.1 35.5 10 Net operating profit excluding

39. Slide 39: Q1 FY08 - Results Overview

    Q1 FY08 – Results Overview For personal use only 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

40. Slide 40: Q1 FY08 - Outperforming housing market

    Q1 FY08 – Results Overview For personal use only USA Fibre Cement – Outperforming housing market Net Sales down 1% to US$346.1 million Sales Volume down 5% to 573.4 mmsf Average Price up 5% to US$604 per msf EBIT up 11% to US$114.4 million EBIT Margin up 3.5 pts to 33.1% 40

41. Slide 41: Q1 FY08 - Asia Pacific Fibre Cement

    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

42. Slide 42: Corporate Issues and Challenges

    Corporate Issues and Challenges For personal use only The company continues to focus on the effective management of a number of corporate matters, including: ƒ Ongoing compliance with Amended Final Funding Agreement (received shareholder approval February 2007): ƒ Asbestos compensation funding; ƒ Me

43. Slide 43: Summary

    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

44. Slide 44: Disclaimer

    Disclaimer For personal use only This Management 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 on Forms 20-F and 6-K, in our annual rep

45. Slide 45: Endnotes

    Endnotes For personal use only 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

46. Slide 46: Endnotes - Financial Ratios

    Endnotes 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 amounts capi

47. Slide 47: 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

48. Slide 48: Non-US GAAP Financial Measures (continued)

    For personal use only Non-US GAAP Financial Measures (continued) Net operating profit excluding asbestos– Net operating profit excluding asbestos is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than net income. The company has included this

49. Slide 49: 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

50. Slide 50: UBS London Conference September 2007

    For personal use only UBS London Conference 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 pre

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