James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (March 2015)
41 slides from James Hardie Industries's investor presentation, Mar 24, 2015
Slide 1: Investor Presentation March 2015
Exhibit 99.2 INVESTOR PRESENTATION MARCH 2015
Slide 2: Disclaimer
DISCLAIMER This Investor Presentation contains forward-looking statements. James Hardie Industries plc (“James Hardie” or the “company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities and Exchange Commission, on Forms 20-F and
Slide 3: Disclaimer (continued)
DISCLAIMER (continued) Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward-looking
Slide 4: Agenda
AGENDA • Global Strategy and Business Overview • USA & Europe Fiber Cement • Asia Pacific Fiber Cement • Capital Management Framework • Group Outlook and Guidance • Appendix In this Investor Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US G
Slide 5: Global Strategy: Industry Leadership and Profitable Growth
GLOBAL STRATEGY Industry Leadership and Profitable Growth • Introduce differentiated products to deliver a sustainable competitive advantage • Aggressively grow demand for our products in targeted market segments PAGE 5
Slide 6: A Growth Focused Company
A GROWTH FOCUSED COMPANY • Annual net sales US$1.7+b • Total assets US$2.0b • Strong cash generation • Operations in North America, Asia Pacific and Europe • 3,140 employees • Market cap US$5.1b (approx) • S&P/ASX 100 company • NYSE ADR listing Market capitalization as at 6 March 2015. Total assets
Slide 7: Group Overview
GROUP OVERVIEW Three and Nine Months Ended 31 December 9 Months 9 Months Q3'15 Q3'14 Change Change FY15 FY14 Adjusted EBIT (US$ millions) 66.9 55.2 21% 223.2 195.4 14% Adjusted EBIT Margin % 17.2 15.6 1.6 pts 17.9 17.5 0.4 pts Adjusted Net Operating Profit 48.6 43.7 11% 164.1 152.0 8% Net operating
Slide 8: Key Themes
KEY THEMES • Group net sales increased 10% and 11% for the quarter and nine months, respectively, compared to pcp 1 • Group adjusted net operating profit increased 11% for the quarter and 8% for the nine months compared to pcp 1 • Higher volumes across our USA and Europe and Asia Pacific Fiber Cemen
Slide 9: World Leader in Fiber Cement
WORLD LEADER IN FIBER CEMENT USA & Europe Asia Pacific DUBLIN JHX Manufacturing Operations JHX Manufacturing Operations – Production Suspended JHX Sales Office Net Sales EBIT ² Asia Pacific Asia Pacific 24% 27% Geographic Mix¹ USA and Europe USA and Europe 76% 73% 1 All percentages are for the 3rd q
Slide 10: Creating a Sustainable and Differentiated Advantage
CREATING A SUSTAINABLE AND DIFFERENTIATED ADVANTAGE Research & Development: Significant and consistent investment • US$33.1m spent on Research & Development in FY14 • US$363.1m spent on Research & Development since 2000 James Hardie Siding Products History of Fiber Cement Substrate Development PAGE
Slide 11: Delivering Superior Product Performance
DELIVERING SUPERIOR PRODUCT PERFORMANCE Fiber cement is more durable than wood and engineered wood, looks and performs better than vinyl, and is more cost effective and quicker to build with than brick Fiber Cement Vinyl Engineered Wood Fire resistant Hail resistant Resists warping Resists buckling
Slide 12: Building a Portfolio of Products and Brands
BUILDING A PORTFOLIO OF PRODUCTS AND BRANDS Primary Products Trim / Commercial Interior Walls / Soffit Backerboard Siding Flooring Fascia Exteriors Ceilings U.S. & Europe Asia Pacific Brand Portfolio PAGE 12
Slide 13: USA and Europe Fiber Cement Segment
USA AND EUROPE FIBER CEMENT SEGMENT USA Plant Locations • Largest fiber cement producer in North America Tacoma, WA • 2,100 employees • 9 manufacturing plants¹ Peru, IL • 2 research and development Reno, NV facilities Pulaski, VA Fontana, CA Summerville, Waxahachie, SC 3Q FY15 3Q FY14 TX Net Sales U
Slide 14: Aggressively Growing Demand for Our Products
AGGRESSIVELY GROWING DEMAND FOR OUR PRODUCTS USA Fiber Cement Rolling 12 month average of seasonally adjusted estimate of housing starts by US Census Bureau PAGE 14
Slide 15: Achieving the Right Value for Our Products
ACHIEVING THE RIGHT VALUE FOR OUR PRODUCTS USA and Europe Fiber Cement Average Net Sales Price 710 678 670 648 652 642 632 626 630 609 597 588 590 558 550 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 YTD FY15 PAGE 15
Slide 16: USA and Europe: Delivering Strong Returns
USA AND EUROPE: DELIVERING STRONG RETURNS Quarterly EBIT and EBIT Margin¹ 80 35 70 30 60 25 50 20 40 15 30 10 20 5 10 0 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 EBIT EBIT Margin 1 Excludes asset impairment charges of US$14.3 million in 4th quarter FY12, US$5.8 million in 3rd quarter FY13 and US$11.1 mil
Slide 17: Asia Pacific Fiber Cement Segment
ASIA PACIFIC FIBER CEMENT SEGMENT Asia Pacific Plant Locations • 985 employees • 5 manufacturing plants across Australia, New Zealand and the Philippines • 1 research and development facility 3Q FY15 3Q FY14 Net Sales US$93.9m US$90.6m EBIT US$23.5m US$21.3m EBIT Margin 25.0% 23.5% EBIT and EBIT mar
Slide 18: Asia Pacific: Delivering Strong Returns
ASIA PACIFIC: DELIVERING STRONG RETURNS Asia Pacific Fiber Cement Segment Average Net Sales Price Quarterly EBIT and EBIT Margin¹ 1 EBIT and EBIT margin excludes New Zealand weathertightness claims PAGE 18
Slide 19: Targetting the Right Product into the Right Market
TARGETTING THE RIGHT PRODUCT INTO THE RIGHT MARKET Asia Pacific Core Markets Ceilings and partitions Exterior cladding Philippines Australia General purpose flooring Interior walls New Zealand Australia PAGE 19
Slide 20: Financial Management Supporting Growth
FINANCIAL MANAGEMENT SUPPORTING GROWTH 1 Strong Financial Management 2 Disciplined Capital Allocation 3 Liquidity and Funding Investing in R&D and capacity ~$590 million of bank Strong margins and expansion to support organic operating cash flows facilities, 44% liquidity as growth of Q3’15 Strong g
Slide 21: FY2015 Outlook and Guidance
FY2015 OUTLOOK AND GUIDANCE USA and Europe Fiber Cement Outlook • The Company expects our performance in the fourth quarter of fiscal 2015 to be consistent with our results for the first nine months of fiscal 2015 • However, there is uncertainty due to the continued variability in the short term eco
Slide 22: Appendix
James Hardie APPENDIX
Slide 23: Key Ratios
KEY RATIOS 9 Months Ended 31 December 9 Months FY15 9 Months FY14 9 Months FY13 1 EPS (Diluted) (US Cents) 37c 34c 25c 2 17.9% 17.5% 14.5% EBIT/ Sales (EBIT margin) 1 Gearing Ratio 20.3% (13.4)% (13.9)% 2 49.6x 63.0x 43.6x Net Interest Expense Cover 2 106.3x 65.1x 110.8x Net Interest Paid Cover Net
Slide 24: USA and Europe Fiber Cement – 5 Year Results Overview
USA AND EUROPE FIBER CEMENT – 5 YEAR RESULTS OVERVIEW FY10 FY11 FY12 FY13 FY14 Net Sales 828 814 862 951 1,128 US$m Sales Volume 1,304 1,248 1,332 1,489 1,697 mmsf Average Price 632 648 642 626 652 US$ per msf ² EBIT US$m¹ 209 160 163 163 237 EBIT Margin %¹ 25 20 19 17 21 1Excludes asset impairment
Slide 25: Asia Pacific Fiber Cement – 5 Year Results Overview
ASIA PACIFIC FIBER CEMENT – 5 YEAR RESULTS OVERVIEW FY10 FY11 FY12 FY13 FY14 Net Sales 297 353 376 370 366 US$m Sales Volume 390 408 392 394 417 mmsf Average Price 886 906 906 901 930 A$ per msf ² EBIT US$m¹ 59 79 86 75 83 EBIT Margin %¹ 20 23 23 20 23 1 Excludes New Zealand product liability expens
Slide 26: Results for the 3rd Quarter
rd RESULTS FOR THE 3 QUARTER Summary Three Months Ended 31 December Net sales increased 10%, favorably impacted by: US$ Millions Q3 '15 Q3 '14 % Change • Higher sales volumes; and Net sales 388.4 353.2 10 • Higher average net sales price in the USA and Europe Fiber Cement segment Gross profit 135.2
Slide 27: Gross Profit - Group
GROSS PROFIT - GROUP 160.0 36.0 34.8% 140.0 35.0 $135.2 34.0 120.0 33.0 100.0 $96.2 32.0 80.0 30.0% 31.0 60.0 30.0 40.0 29.0 20.0 28.0 - 27.0 Q3 FY13 Q3 FY14 Q3 FY15 • Gross profit continues to remain strong, and consistent with the prior three year trend • Price has improved as we continue to execu
Slide 28: Income Tax
INCOME TAX Three and Nine Months ended 31 December • 23.6% estimated adjusted effective tax rate (ETR) for the year 9 Months 9 Months Q3’15 Q3’14 FY15 FY14 • Adjusted income tax expense and adjusted ETR Operating profit before taxes 124.7 95.6 315.0 320.2 increased due to changes in geographical mix
Slide 29: Cashflow
CASHFLOW 9 Months FY9 Months FY (US$ Millions) Change (%) • Adjusted EBIT increased US$27.8 million 2015 2014 compared to pcp EBIT 263.6 286.3 (8) 1 Asbestos related (94.8) (129.5) (27) • Cash flow from operations includes US$113.0 Annual AICF contribution (113.0) - million contribution to AICF paid
Slide 30: FY15 Global Capex Spend and Key Projects
FY15 GLOBAL CAPEX SPEND AND KEY PROJECTS Nine Months FY15 Project Description Spend th Plant City, Florida - 4 sheet machine and ancillary facilities US$38.5 million rd Cleburne, Texas - 3 sheet machine and ancillary facilities US$19.9 million Carole Park, Queensland - Capacity expansion project US$
Slide 31: USA and Europe Fiber Cement – Plant Capacity
USA AND EUROPE FIBER CEMENT – PLANT CAPACITY Plant Capacity Flat Sheet Plant Capacity (mmsf) Plants operating Cleburne, Texas 466 Additional capacity by mid calendar year 2015 200 Peru, Illinois 560 Plant City, Florida 300 Additional capacity by mid calendar year 2015 300 Pulaski, Virginia 600 Reno,
Slide 32: US Input Costs
US INPUT COSTS Quarterly US Input Costs Discussion: • Input costs are up significantly over the prior year, and beginning to flatten out or decrease • The price of NBSK pulp remains near a three-year peak • The cost of gas and electric for industrial users decreased to slightly above its historical
Slide 33: Asbestos Fund – Proforma (unaudited)
ASBESTOS FUND – PROFORMA (unaudited) Claims Data • For the quarter and nine months ended 31 December 2014, A$ millions we note the following related to asbestos claims: AICF cash and investments -31 March 2014 65.5 • Claims received during both Q3’15 and nine months Contribution to AFFA by James Har
Slide 34: Definitions and Other Terms
DEFINITIONS AND OTHER TERMS This Investor 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 the Management’s Analysis of Results, Media Release and Consolidated Financial Statements Defini
Slide 35: Definitions and Other Terms
DEFINITIONS AND OTHER TERMS Financial Measures – US GAAP equivalents This Investor Presentation contains financial statement line item descriptions that are considered to be non-US GAAP, but are consistent with those used by Australian companies. Because the company prepares its Condensed Consolidat
Slide 36: Definitions and Other Terms
DEFINITIONS AND OTHER TERMS EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales. Sales Volumes mmsf – million square feet, where a square foot is defined as a standard square foot of 5/16” thickness msf – thousand square feet, where a square foot is defined as a standard square
Slide 37: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES Adjusted EBIT and Adjusted EBIT margin – Adjusted EBIT and Adjusted EBIT margin are not measures of financial performance under US GAAP and should not be considered to be more meaningful than EBIT and EBIT margin. Management has included these financial measures to pro
Slide 38: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES Adjusted Net operating profit – Adjusted net operating profit is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than net operating profit. Management has included this financial measure to provide investors with
Slide 39: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES Adjusted Diluted earnings per share – Adjusted diluted earnings per share is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than diluted earnings per share. Management has included this financial measure to provi
Slide 40: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES Adjusted effective tax rate on earnings – Adjusted effective tax rate on earnings is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than effective tax rate. Management has included this financial measure to provi
Slide 41: INVESTOR PRESENTATION
INVESTOR PRESENTATION FEBRUARY 2015
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