James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (February 2010)
29 slides from James Hardie Industries's investor presentation, Feb 26, 2010
Slide 1: Investor Presentation February 2010 / Disclaimer
For personal use only Investor Presentation February 2010 Disclaimer Text goes here This Management Presentation contains forward-looking statements. James Hardie may from time to time make forward-looking statements in its periodic reports filed with or furnished to the United States Securities and
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 volume terms, fin
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 operating assets US$1.0b Total assets US$1.9b Net debt as at 31 December 2009 US$141m Operations in North America, Asia Pacific and Europe 2,300 employees Market cap US$3.26b S&P/ASX 100 company
Slide 4: Global strategy
Global Text goesstrategy here For personal use only Industry leadership and profitable growth Aggressively grow demand for our products in targeted market segments Grow our overall market position while defending our share in existing market segments Offer products with superior value to that of our
Slide 5: USA and Europe Fibre Cement – brief history
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 9 USA andhere Text goes Europe Fibre Cement – brief history 1990 – 1995 Entered US in 1990 to manufac
Slide 6: USA and Europe Fibre Cement – brief history continued
USA andhere Text goes Europe Fibre Cement – brief history continued For personal use only 2000 – 2006 A number of cladding competitors exit Business continued to grow strongly in buoyant housing market Product leadership strategy helps revenue outstrip volume growth Business model is proven - contin
Slide 7: Sustainable competitive advantage
USA andhere Text goes Europe Fibre Cement For personal use only Sustainable competitive advantage Unique plant engineering and proprietary process technology and product formulations – significant investment in R&D Superior capital cost efficiency Low cost manufacturer Only national producer of fibr
Slide 8: Sales mix and US siding market
USA andhere Text goes Europe Fibre Cement – sales mix For personal use only New Construction vs. Repair and Remodel New Construction R&R Total Sales 35% 65% Exterior Products 39% 61% Interior Products 25% 75% Exterior vs. Interior Products Exteriors Interiors Volume 72% 28% Revenue 80% 20% All marke
Slide 9: Understanding the Repair and Remodel market
Understanding Text goes here the Repair and Remodel market For personal use only Where does the product go? Replace MF 16% Replace SF 48% Repairs 27% Add & Alts 7% Repair and Remodel siding market – 5.7 billion square feet (2008 est) All market and market share figures are management estimates and c
Slide 10: Interior products
Interior Text goes products here For personal use only Hardiebacker Net sales growing strongly CAGR* 17% (FY00-FY09) Others Leading position in 1/4” segment technology advantage for FY 1997 657mmsf (Market) floor applications Hardiebacker 500® is driving penetration on wall applications Hardiebacker
Slide 11: Largest fibre cement producer in North America
Largest fibre cement producer in North America Text goes here For personal use only Plant locations JH Plant Design Capacity Flat Sheet Capacity Plants (mmsf) Tacoma, WA Plants operating at December 2009 Cleburne, Texas 500 Peru, IL Blandon, PA Peru, Illinois 560 Plant City, Florida 300 Reno, NV Pul
Slide 12: Asia Pacific Fibre Cement
Asia Pacific Text goes here Fibre Cement For personal use only Five manufacturing plants in Asia Pacific FY09 net sales US$273m FY09 EBIT US$47.1m Higher value differentiated products Lower delivered cost Shift to growth model Philippines focus on profitability 23 Agenda Text goes here Operations, s
Slide 13: 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 competitive pos
Slide 14: 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 Best practice installation
Slide 15: 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 strategically located
Slide 16: Changing US product mix / NAHB Housing Starts
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 Today Tomorrow ColorPlus Next Generation HardieZone HardiePlank Hardieplank/ ColorPlus Cemplank Cemplank 31 Total Text g
Slide 17: 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, Summerville S
Slide 18: Primary Growth Performance / Average Net Selling Price
US and here Text goes Europe Fibre Cement For personal use only Primary Growth Performance Sources: Dodge US addressable starts (SF & MF-low); US Census R&R $ expenditures less CPI Note: • US Census discontinued their R&R $ expenditures report in 2007 • After 2007 R&R = avg. published Home Depot & L
Slide 19: EBIT and EBIT Margin
US and here Text goes Europe 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 FY04 FY05 FY06 FY07 FY08 FY09 FY10 Q3 EBIT EBIT/Sales * Excludes impairment charges of US$45.6 million in Q4 FY08 37 Agenda Text goes here Ope
Slide 20: Long term financial targets / Q3 FY10 results overview
Long term 1 Text goes herefinancial targets For personal use only Actual Actual Actual Actual Actual Actual Actual FY10** FY09 FY08 FY07 FY06 FY05 FY04 Revenue Growth - (18)% (5)% 4% 23% 23% 25% EBIT Margin* 27.5 14% 20% 22% 21% 19% 18% Return on Capital 19.9 17% 25% 28% 32% 27% 23% Employed* 1Long
Slide 21: Q3 FY10 – results summary and outlook
Q3 Text FY10 – results summary goes here For personal use only USA and Europe Fibre Cement business results benefited from: Lower input costs, primarily pulp, energy and freight Higher average net sales price Improved plant performance Product mix shift and primary demand growth Asia Pacific Fibre C
Slide 22: Q3 FY10 – Group Outlook
Q3 Text FY10 - Group Outlook goes here For personal use only Australia The residential housing market is expected to improve modestly during calendar 2010, supported by increases in housing approvals, robust employment numbers, high levels of immigration and heightened competition amongst mortgage l
Slide 23: Q3 FY10 – Key Ratios
Q3 Text FY10 – Key Ratios goes here For personal use only 9 Months FY10 FY09 FY08 EPS (Diluted)¹ 25.3c 22.3c 38.1c Dividend Paid per share N/A 8.0c 27.0c Return on Shareholders’ Funds¹ 14.9% 11.2% 17.7% Return on Capital Employed² 19.9% 16.7% 24.2% EBIT/ Sales (EBIT margin)² 20.1% 14.2% 19.2% Gearin
Slide 24: Legacy Issue Update
Legacy Text goes Issue here Update For personal use only Asbestos On 7 November 2009, the Australian and NSW Governments announced an A$320m standby loan facility for Asbestos Injuries Compensation Fund ATO – 1999 Disputed Amended Assessment Federal Court hearing completed September 2009, judgement
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 technology On
Slide 26: Endnotes and Definitions
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 (continued)
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 Financial Measures (continued)
Text goes here For personal use only Non-US GAAP Financial Measures (continued) General corporate costs excluding ASIC and domicile change related costs – General corporate costs excluding ASIC and domicile change related costs is not a measure of financial performance under US GAAP and should not b
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