James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q1 FY2013 Earnings Presentation
44 slides from James Hardie Industries's earnings presentation, Aug 15, 2012
Slide 1: Q1 FY13 Management Presentation
Exhibit 99.4 Q1 FY13 MANAGEMENT PRESENTATION 13 August 2012
Slide 2: Disclaimer
DISCLAIMER 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 SEC, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation
Slide 3: Agenda
AGENDA Overview and Operating Review – Louis Gries, CEO Financial Review – Russell Chenu, CFO Questions and Answers In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures included in the Definitions secti
Slide 4: Overview and Operating Review
OVERVIEW AND OPERATING REVIEW Louis Gries, CEO
Slide 5: Group Overview
GROUP OVERVIEW 1 • The net operating result excluding asbestos, ASIC expenses and tax adjustments increased 11% to US$ 43.8 million and reflects: • A non-recurring foreign exchange gain of US$5.5 million arising on repayment of an A$ intercompany loan on conclusion of the RCI tax litigation • An ord
Slide 6: USA and Europe Fibre Cement 1st Quarter Result
USA AND EUROPE FIBRE CEMENT 1st Quarter Result 1 Net Sales up 15% to US$252.0 million Sales Volume up 17% to 388.1 mmsf Average Price down 2% to US$649 per msf EBIT up 5% to US$50.3 million EBIT Margin down 1.8 pts to 20.0% 1 Comparisons are of the 1st quarter of the current fiscal year versus the 1
Slide 7: USA and Europe Fibre Cement: Average Net Sales Price
USA AND EUROPE FIBRE CEMENT Average Net Sales Price (US dollars) 680 US$649 640 600 560 520 480 FY07 FY08 FY09 FY10 FY11 FY12 Q1 FY13 7
Slide 8: USA and Europe Fibre Cement: EBIT and EBIT Margin
USA AND EUROPE FIBRE CEMENT EBIT and EBIT Margin 1 140 35 120 30 100 25 80 20 60 15 40 10 20 5 0 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 EBIT EBIT Margin 1 Excludes impairment charges of US$45.6 million in Q4 FY08 and US$14.3 million in Q4 FY12 8
Slide 9: Asia Pacific Fibre Cement 1st Quarter Result
ASIA PACIFIC FIBRE CEMENT 1st Quarter Result 1 Net Sales down 7% to US$87.7 million Sales Volume down 3% to 95.1 mmsf Average Price up 1% to A$913 per msf EBIT down 16% to US$17.7 million EBIT Margin down 2.3 pts to 20.2% 1 Comparisons are of the 1st quarter of the current fiscal year versus the 1st
Slide 10: Group 1st Quarter Summary
GROUP 1st QUARTER SUMMARY 1 USA and Europe Fibre Cement results reflected: Demand stabilising at levels above last year Higher sales volume, lower input costs (primarily pulp) and lower freight costs, partially offset by a lower average net sales price and higher fixed manufacturing and organisation
Slide 11: Total U.S. Housing Starts
James Hardie U.S. Housing Starts Calendar Quarters g 6 02'0603'06 04'0601'07 02°07 03'0704'07 211080208 03'0804'08 211090209 03'0904'091'1002'10 eo 3 -200 3 & -400 2 2 3 — -t00 -800 -1000 1200 Housing starts 9-—-—%Growth (same QtrPY) Source: US Census Bureau - New Privately-Owned Housing Units Start
Slide 12: Group Outlook
GROUP OUTLOOK United States Some encouraging industry data points continued to emerge during the quarter, including increased stability of house values in recent months Early stages of a recovery in residential market appears to be underway The extent and rate of improvement, however, is uncertain C
Slide 13: Group Outlook: Key Priorities
GROUP OUTLOOK Key Priorities The company’s key medium term priorities in the US are: Grow primary demand and exterior cladding market share – with focus on repair and remodel and non-metro markets Increase market penetration of our ColorPlus ® and Trim products Continue to rollout our job pack distr
Slide 14: Financial Review
FINANCIAL REVIEW Russell Chenu, CFO
Slide 15: Operating Review Highlights
OPERATING REVIEW Highlights Earnings impacted by: Improved volume in US in a more favourable market environment Price in US constrained by product mix Weakness in Australia market – adversely impacting volume and cost Non-recurring foreign exchange gain of US$5.5 million Strong net operating cash fl
Slide 16: Changes in A$ versus US$
CHANGES IN A$ VERSUS US$ 1.20 1.10 1.00 0.90 0.80 0.70 0.60 30 Sep 08 31 Dec 08 31 Mar 09 30 Jun 09 30 Sep 09 31 Dec 09 31 Mar 10 30 Jun 10 30 Sep 10 31 Dec 10 31 Mar 11 30 Jun 11 30 Sep 11 31 Dec 11 31 Mar 12 30 Jun 12 – Unfavourable impact from translation of Asia Pacific results Earnings Balance
Slide 17: Results Q1
RESULTS Q –1 US$ Millions Q1 '13 Q1 '12 % Change Net sales 339.7 313.6 8 Gross profit 110.0 108.2 2 SG&A expenses (44.3) (45.5) 3 Research & Development expenses (8.4) (7.0) (20) Asbestos adjustments 25.2 (38.2) - EBIT 82.5 17.5 - Net interest expense (expense) 0.2 (1.0) - Other income (expense) 0.4
Slide 18: Results Q1 (continued)
RESULTS Q – 1 (CONTINUED) US$ Millions Q1 '13 Q1 '12 % Change Net operating profit 68.5 1.0 - Asbestos: Asbestos adjustments (25.2) 38.2 - Other asbestos 1 (0.8) 0.1 - Tax expense related to asbestos adjustments 2.2 - - ASIC related expenses 0.1 0.2 (50) Tax adjustments (1.0) (0.1) - Net operating p
Slide 19: Segment Net Sales Q1
SEGMENT NET SALES Q1– US$ Millions Q1 '13 Q1 '12 % Change USA and Europe Fibre Cement 252.0 219.8 15 Asia Pacific Fibre Cement 87.7 93.8 (7) Total 339.7 313.6 8 19
Slide 20: Segment EBIT Q1
SEGMENT EBITQ1 – US$ Millions Q1 '13 Q1 '12 % Change USA and Europe Fibre Cement 50.3 48.0 5 Asia Pacific Fibre Cement 17.7 21.1 (16) 1 Research & Development (6.0) (5.1) (18) Total segment EBIT 62.0 64.0 (3) General corporate excluding asbestos and ASIC expenses (4.3) (7.5) 43 Total EBIT excluding
Slide 21: Income Tax Expense Q1
INCOME TAX EXPENSE Q1– US$ Millions Q1 '13 Q1 '12 Operating profit before income taxes 83.1 15.0 Asbestos: Asbestos adjustments (25.2) 38.2 Other asbestos 1 (0.8) 0.1 Operating profit before income taxes excluding Asbestos and asset impairments 57.1 53.3 Income tax expense (14.6) (14.0) Asbestos: Ta
Slide 22: Cashflow
CASHFLOW 1 US$ Millions Q1 '13 Q1 '12 EBIT 82.5 17.5 Non-cash items: Asbestos adjustments (25.2) 38.2 Other non-cash items 16.6 18.7 Net working capital movements (13.1) (1.2) Cash Generated By Trading Activities 60.8 73.2 Tax payments net (0.6) (24.6) Change in other non-trading assets and liabilit
Slide 23: Capital Management
CAPITAL MANAGEMENT A dividend of US38.0 cents per security was paid on 23 July 2012 from FY2012 earnings. The total amount of the dividend was US$166.4 million The full year dividend from FY2012 earnings was US42.0 cents per security. The full year dividend was at the top end of the dividend payout
Slide 24: Debt
DEBT At 30 June 2012: US$ Millions Total facilities 280.0 Gross debt - Cash 297.6 Net cash (297.6) Unutilised facilities and cash 577.6 Net cash of US$297.6 million compared to net cash of US$265.4 million at 31 March 2012 Weighted average remaining term of total facilities was 0.7 years at 30 June
Slide 25: Asbestos Fund Pro-Forma (Unaudited)
Asbestos FundPro – Forma (Unaudited) A$ millions AICF cash and deposits - 31 March 2012 62.5 Contribution to AFFA by James Hardie 1 132.3 Insurance and cross claim recoveries 11.2 Interest income and unrealised gain on investments 1.4 Claims paid (35.2) Operating costs (0.9) Repayment of NSW Governm
Slide 26: Key Ratios
KEY RATIOS 1 3 Months 3 Months 3 Months FY2013 FY2012 FY2011 1 EPS (Diluted) 10.0c 9.0c 9.2c 2 EBIT/ Sales (EBIT margin) 17.0% 18.0% 20.4% 1 Gearing Ratio -32.1% 2.1% 13.2% 2 Net Interest Expense Cover 57.7x 37.7x 38.2x 2 Net Interest Paid Cover 115.4x 33.2x 34.2x 3 Net Debt Payback - 0.4yrs 1.1yrs
Slide 27: Summary
SUMMARY 1 Net operating profit excluding asbestos, ASIC expenses and tax adjustments for the 1st quarter was US$43.8 million and reflected: A foreign exchange gain of US$5.5 million arising on repayment of an A$ intercompany loan associated with the conclusion of the RCI tax litigation in Australia
Slide 28: Questions
QUESTIONS
Slide 29: Appendix
APPENDIX
Slide 30: USA Fibre Cement: Top Line Growth
USA FIBRE CEMENT Top Line Growth '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 11 12 JH Volume Housing Starts JH Revenue Rolling 12 month average of seasonally adjusted estimate of housing starts by US Census Bureau 30
Slide 31: General Corporate Costs Q1
GENERAL CORPORATE COSTS– Q1 US$ Millions Q1 '13 Q1 '12 % Change Stock compensation expense 2.6 2.0 (30) Other costs 7.2 5.5 (31) General corporate costs excluding ASIC expenses and foreign exchange gain 9.8 7.5 (31) ASIC related expenses 0.1 0.2 50 Intercompany foreign exchange gain (5.5) - - Genera
Slide 32: EBITDA Q1
EBITDA –Q1 Q1 '13 Q1 '12 % Change US$ Millions EBIT USA and Europe Fibre Cement 50.3 48.0 5 Asia Pacific Fibre Cement 17.7 21.1 (16) Research & Development (6.0) (5.1) (18) General corporate excluding asbestos and ASIC expenses (4.3) (7.5) 43 Depreciation and Amortisation USA and Europe Fibre Cement
Slide 33: Capital Expenditure
CAPITAL EXPENDITURE US$ Millions Q1 '13 Q1 '12 % Change USA and Europe Fibre Cement 13.1 9.8 34 Asia Pacific Fibre Cement 1.8 2.2 (18) Total 14.9 12.0 24 33
Slide 34: Net Interest Income (Expense)
NET INTEREST INCOME (EXPENSE) US$ Millions Q1 '13 Q1 '12 Gross interest expense (0.8) (0.8) Interest income 0.4 0.1 Realised loss on interest rate swaps (0.5) (0.8) Net interest expense excluding AICF interest Income (0.9) (1.5) AICF interest income 1.1 0.5 Net interest income (expense) 0.2 (1.0) 34
Slide 35: Legacy Issues Update
LEGACY ISSUES UPDATE ASIC Proceedings On 3 May 2012, the High Court of Australia delivered its judgment in the appeals and cross-appeals of the December 2010 decision of the New South Wales Court of Appeal James Hardie did not appeal the NSW Court of Appeal’s decision, so it was not party to the Hig
Slide 36: Endnotes
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 the Management’s Analysis of Results, Media Release and Consolidated Financial Statements. Definitions Non-financ
Slide 37: Endnotes (continued)
ENDNOTES (CONTINUED) Sales Volumes mmsf– million square feet, where a square foot is defined as a standard square foot of thickness. 5/16” msf– thousand square feet, where a square foot is defined as a standard square foot ofthickness. 5/16” Financial Ratios GearingRatio– Net debt (cash)dividedby ne
Slide 38: Non-US GAAP Financial Measures
NON-US GAAP FINANCIAL MEASURES EBIT and EBIT margin excluding asbestos and ASIC expenses – EBIT and EBIT margin excluding asbestos and ASIC expenses 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 in
Slide 39: Non-US GAAP Financial Measures (continued)
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 not be considered to be more meaningfu
Slide 40: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Non-US GAAP Financial Measures (continued) Diluted earnings per share excluding asbestos, ASIC expenses and tax adjustments – Diluted earnings per share excluding asbestos, ASIC expenses and tax adjustments is not a measure of financial performance under US
Slide 41: Non-US GAAP Financial Measures (continued)
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 meaningful than effective tax rate. Managem
Slide 42: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) EBITDA – is not a measure of financial performance under US GAAP and should not be considered an alternative to, or more meaningful than, income from operations, net income or cash flows as defined by US GAAP or as a measure of profitability or liquidity. N
Slide 43: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) General corporate costs excluding ASIC expenses and intercompany foreign exchange gain – General corporate costs excluding ASIC expenses and intercompany foreign exchange gain is not a measure of financial performance under US GAAP and should not be conside
Slide 44: Q1 FY13 Management Presentation
Q1 FY13 MANAGEMENT PRESENTATION 13 August 2012
James Hardie Industries — Q1 FY2013 Earnings Presentation on 6ix