James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Day (September 2014)
45 slides from James Hardie Industries's investor day presentation, Sep 24, 2014
Slide 1: R&D Overview
R&D OVERVIEW Michael Benjamin 24 September 2014 Exhibit 99.4
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Slide 3: Disclaimer
2 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, invitatio
Slide 4: Forward-looking statements cautionary notes
3 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 statements but are n
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Slide 6: Background
4 BACKGROUND Michael Benjamin, Director, R&D 11+ years in James Hardie USA 4 years in R&D Chicago • ColorPlus R&D Manager • Non-FC R&D Manager • Product Development • Technology Implementation 6 years in R&D Fontana • US R&D Director • Role includes R&D, Engineering and Claims Management 1+ year in
Slide 7: Presentation Agenda
5 • R&D Strategy • R&D Overview – Dynamic Capability – FC Centric Focus – JH Business Impact • Key Takeaways / Summary • Questions PRESENTATION AGENDA
Slide 8: Enable James Hardie Product Leadership Strategy
6 Enable James Hardie Product Leadership Strategy TECHNOLOGY STRATEGY • Provide a continuous pipeline of innovative new products and technologies with sustainable advantages to achieve our category and market share goals • Our role is to act as the technology pipeline for the organization
Slide 9: R&D Overview: Focus, Results, Capability
7 Focus Results Capability R&D OVERVIEW JH Business Impact JH R&D’s Key Strengths Dynamic Capability Evolves further – technology advantage FC Centric Focus People Execution
Slide 10: Dynamic Capability R&D Overview
DYNAMIC CAPABILITY R&D Overview JH Business Impact Focus Capability
Slide 11: R&D Locations
9 Fontana, CA Naperville , IL Sydney , NSW R&D LOCATIONS Three research centers – US and Australia • Fontana, CA • Naperville, IL • Sydney, NSW
Slide 12: R&D Resources
10 Diverse workforce of 130+ technologists • Scientists Chemistry, Materials, Inorganic, Composite, Wood & Fibers and Building Science • Engineers Chemical, Mechanical, Electrical, Civil and Environmental R&D RESOURCES ~60% have PhD or Master’s Degree ~70% with greater than 6 years service Bachelor'
Slide 13: Research Capabilities
11 RESEARCH CAPABILITIES Thermal Properties Compositional Analysis Mechanical Properties Microscopy
Slide 14: Research Capabilities
12 RESEARCH CAPABILITIES Longer-Term, Real-Life Exposure
Slide 15: -@ Gal
@ -@ Gal ® JamesHardie
Slide 16: Innovation Capability
13 Innovation tools • 3D printing prototypes (Faster concepts) • Pilot processes (Concept investment) Intellectual property • Idea generation process • Focused approach on opportunities INNOVATION CAPABILITY IP Tools (IP Space Availability) Crowded IP Space IP Space Available All FC siding Coatings
Slide 17: Non-FC Capability
14 Chicago R&D is operational from Q4 FY13, focusing mainly on non–FC development • Product Development • Non-FC materials characterization • Product and system testing • Pilot lines Currently capable to develop and implement non-FC technology initiatives aligned with business needs NON–FC CAPABILIT
Slide 18: R&D Spend
15 R&D yearly spend is divided between research and development projects Research – Core understanding of technologies and science behind them Development – Focus around implementing new technology and new products R&D SPEND
Slide 19: FC Centric Focus R&D Overview
FC CENTRIC FOCUS R&D Overview JH Business Impact Focus Capability
Slide 20: JamesHardie
JamesHardie
Slide 21: JH Innovation Process
17 Feasibility Development Implementation Post Implementation Feedback Loop Business Need Business Strategy Enable effective development and implementation of key initiatives Ensure continuous pipeline of new concepts and ideas JH INNOVATION PROCESS Decision to Develop Decision to Implement Transfer
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Slide 23: FC Strategic Priorities
18 FC STRATEGIC PRIORITIES Product Performance New Product Development Platform Development Technical Support • Substrate Development • Coatings Development • Raw Materials Formulation • Test Method Development • Trim/Shapes • ColorPlus® Development • Reveal® • Top of the Market Products • Foam-back
Slide 24: Product Performance Approach
19 Multi-faceted approach to product performance PRODUCT PERFORMANCE APPROACH Product Performance • Material Composition • Product Formation • Raw Material Selection • Raw Material Interaction • Primers • Top Coat Formulation Substrate Coatings
Slide 25: Raw Material Focus
20 Raw material research is an important aspect of product performance and technical support strategies Enhance product performance • Raw material selection • Formulations Technical support • Secure supply – pulp, cement, silica et al., - Raw material sourcing / New formulations • Ensure quality - C
Slide 26: Low Density Additives
21 Interiors Exteriors HZ10® Siding Exteriors HZ5® Siding Low Density (LD) LD Options LD Additive A LD Additive D LD Additive C LD Additive B James Hardie uses low density functional additives for: • Lighter / Thicker products • Ease of use • Performance Our strategy is to reduce dependency on comme
Slide 27: Platform Development Focus
22 Platform A (Current) Plank / Panel Flat sheets Higher throughput Platform B (Current) Thicker products Functional Platform C (New) Aesthetics Product Form High-end products Platform D (New) Shapes Extreme applications Functional Invest in new manufacturing platforms to enable step- change product
Slide 28: Product Development Focus
23 Form Aesthetics Texture Shape Weight Color Function Water management Durability Energy efficiency Concealed fastening Nail line Ease of install Features Balanced mix of step change products and product line extensions to drive JH category and market share growth PRODUCT DEVELOPMENT FOCUS
Slide 29: Non-FC Strategic Priorities
24 Evaluate and develop non–FC technologies for fit with current and future JH business Mouldings – Provide shapes to complement JH FC trim portfolio Windows – Develop non-FC technology as an entry vehicle into NON–FC STRATEGIC PRIORITIES fiber glass windows
Slide 30: JH Business Impact R&D Overview
JH BUSINESS IMPACT R&D Overview JH Business Impact Focus Capability
Slide 31: HardieZone: Engineered for Climate
26 Delivered HardieZone ® Engineered for Climate ® Products th Generation of FC products HARDIEZONE ® – ENGINEERED FOR CLIMATE ®
Slide 32: Product Performance
27 TIME HZ5 ® siding performs 5x better than generic FC in system testing PRODUCT PERFORMANCE Source: James Hardie Internal Research and Testing
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Slide 34: JH vs. Competitors (OSB / Hardboard)
28 JH OSB 1/16 1/4 JH vs. COMPETITORS (OSB / Hardboard) Like Hardboard, OSB siding is a wood based, manufactured product that can experience similar issues when exposed in external applications : Source: James Hardie Internal Research and Testing Termite Activity Splitting Fire Mold Growth Moisture
Slide 35: JH vs. Competitors (CFC)
29 JH vs. COMPETITORS (CFC) Competitive Fiber Cement Siding Source: James Hardie Internal Research and Testing JH CFC Nailing Brittleness (Lower the Better) Source: External Code Compliance Reports (ICC-ES) Wind Speed (mph) # Blind Nail Solutions (Exp. Cat D @ 30ft.) HardiePlank® Siding CFC #1 CFC #
Slide 36: JH vs. Competitors (Vinyl)
30 JH vs. COMPETITORS (Vinyl) Vinyl / PVC Siding Source: James Hardie Internal Research and Testing • Looks cheap • Relatively durable but can melt even from reflected light (low-e window) • Very high thermal movement 7x compared to JH • Poor impact resistance
Slide 37: JH vs. Competitors (Trim)
31 • OSB / Hardboard trim • Poor paint adhesion • Low resistance to mold • High water absorption and swelling • PVC trim • High thermal expansion (7x) • High movement / High gapping • Low thermal stability / Yellowing • Polyurethane composite trim • High thermal expansion (3x) • Low UV resistance (P
Slide 38: Low Density Additives
32 By focusing on low density research, JH was able to reduce the dependency on commercial additives to in-house technology substitutes LOW DENSITY ADDITIVES This Enables: • Lighter / Thicker products • Cost – effective, Durable products • Reliable supply of raw material
Slide 39: Product Development
33 PRODUCT DEVELOPMENT Other Products • Trim extensions • Shingle extensions • High-end panel extensions HardieReveal2.0™Panel System HardiePlank® Lap Siding with Insulation HardieTrim™ Mouldings Artisan® V-Rustic Siding
Slide 40: Strong JH Business Impact
34 In summary, JH R&D has enabled • Impact on product performance • Product leadership compared to competitors • Impact on raw materials and low density materials • Product and platform development • Better innovation STRONG JH BUSINESS IMPACT
Slide 41: JamesHardie
JamesHardie
Slide 42: Summary R&D Overview
SUMMARY R&D Overview JH Business Impact Focus Capability
Slide 43: Key Takeaways
36 KEY TAKEAWAYS James Hardie R&D invests and functions towards: Ensuring Product Performance • JH products demonstrate superior durability compared to the competition Maintaining Product Leadership • Differentiated products are being created to enable future PDG vs. wood and vinyl options Enabling
Slide 44: R&D Future Deliverables
37 R&D FUTURE DELIVERABLES Continue Research and Development of Key Technology Strategies • Product Performance • Raw Materials • Low Density Continue Investments of Key Platform Strategies Continue to Deliver New Products Aligned with Corporate Strategy • Act as the technology pipeline for JH and d
Slide 45: Questions
QUESTIONS R&D Overview JH Business Impact Focus Capability
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