James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q3 FY2023 Earnings Presentation
34 slides from James Hardie Industries's earnings presentation, Feb 14, 2023
Slide 1: Q3 FY23 Management Presentation
Q3 FY23 MANAGEMENT PRESENTATION 14 February 2023
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q3 FY23 Results CAUTIONARY NOTE ON FORWARD‐LOOKING STATEMENTS CAUTIONARY NOTE ON FORWARD‐LOOKING STATEMENTS This Management Presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. James Hardie Industries plc (the “Comp
Slide 3: Agenda
James Hardie Q3 FY23 Results AGENDA • Q3 FY23 Financial Results Aaron Erter CEO • Strategy and Operations Update • Questions and Answers Jason Miele CFO Page 3
Slide 4: Q3 FY23 Financial Results
Q3 FY23 FINANCIAL RESULTS
Slide 5: Global Results
James Hardie Q3 FY23 Results GLOBAL RESULTS Q3 FY23 9 Months FY23 • All 3 regions are simultaneously executing on the 1,026.4 mmsf 3,403.3 mmsf Global Strategy Sales Volume -11% -2% US$860.8 M US$2,859.3 M • 4% decrease in Q3 FY23 Net Sales Net Sales -4% +8% US$165.4 M US$592.3 M • 19% decrease in Q
Slide 6: North America Summary
James Hardie Q3 FY23 Results NORTH AMERICA SUMMARY Q3 FY23 9 Months FY23 • Flat Q3 FY23 Net Sales 700.5 mmsf 2,334.9 mmsf − 10% decline in volumes offset by 10% Price/Mix growth Sales Volume -10% +2% − Continued execution in driving High Value Product penetration with our customers Price/Mix +10% +1
Slide 7: APAC Summary
James Hardie Q3 FY23 Results APAC SUMMARY Q3 FY23 9 Months FY23 • 13% decline in Q3 FY23 Net Sales 125.7 mmsf 431.8 mmsf Sales Volume − 19% decline in volumes due to decelerating housing markets and -19% -8% reduction of customer inventories in Australia and New Zealand Price/Mix +6% +9% − Strong Pr
Slide 8: Europe Summary
James Hardie Q3 FY23 Results EUROPE SUMMARY Q3 FY23 9 Months FY23 • 4% increase in Q3 FY23 Net Sales 200.2 mmsf 636.6 mmsf Sales Volume − 10% decline in volumes as housing activity slowed -10% -10% − Strong Price/Mix growth of +14% Price/Mix +14% +13% • €1.5 million of Q3 FY23 EBIT at an EBIT Margin
Slide 9: Capital Allocation and Guidance
James Hardie Q3 FY23 Results CAPITAL ALLOCATION AND GUIDANCE CAPITAL ALLOCATION FULL YEAR FISCAL YEAR 2023 GUIDANCE Framework Management adjusts full year FY23 • Invest in Organic Growth Adjusted Net Income1 guidance to: • Maintain Flexible Balance Sheet • Deploy Excess Capital to Shareholders US$60
Slide 10: Strategy and Operations Update
STRATEGY AND OPERATIONS UPDATE
Slide 11: FY23 Operational Update
James Hardie Q3 FY23 Results FY23 OPERATIONAL UPDATE Significant inflation impacting US Single Family New Construction $ operations in all three regions Calendar 2022 Growth Outlook1 Dec ‘21 Jun ‘22 Jan ‘23 +6% ‐1% ‐11% Rapid, unexpected deceleration of housing markets US Repair & Remodel Calendar 2
Slide 12: FY23 Operational Update: Strong Financial Results Despite Market Headwinds
James Hardie Q3 FY23 Results FY23 OPERATIONAL UPDATE Global FY23 Full Year Expected Results • Global Net Sales to be a record • Global Volume to be 2nd best fiscal year result ever • Adjusted Net Income to be second highest ever achieved Regional FY23 Full Year Expected Results • Highest ever averag
Slide 13: Managing Decisively to Accelerate Our Competitive Advantages
James Hardie Q3 FY23 Results MANAGING DECISIVELY TO ACCELERATE OUR COMPETITIVE ADVANTAGES Continue Strong Execution of Our Strategy Drive Profitable Volume Share Gain Effectively Balance Our Manufacturing Network Optimize SG&A for Current Market Environment Continue to Invest in Profitable Growth
Slide 14: Drive Profitable Volume Share Gain
James Hardie Q3 FY23 Results DRIVE PROFITABLE VOLUME SHARE GAIN APAC Europe North America Leverage strong market Penetrate underfloor Continue to penetrate the position in all APAC regions heating market via Repair & Remodel segment Therm25 innovation Continue to penetrate the Drive contin
Slide 15: Drive Profitable Volume Share Gain – North America New Construction
James Hardie Q3 FY23 Results DRIVE PROFITABLE VOLUME SHARE GAIN – NORTH AMERICA NEW CONSTRUCTION ~35%1 of James Hardie Volume is New Key Accomplishments Construction vs ~65%1 R&R Deploying largest and most knowledgeable Secured contracts with 24 of the sales team in the category top 25 national bu
Slide 16: Effectively Balance Our Manufacturing Network
James Hardie Q3 FY23 Results EFFECTIVELY BALANCE OUR MANUFACTURING NETWORK North America APAC Europe Effectively Balance Our Manufacturing Organization to Better Align Supply With Demand Deliver a lower cost per unit Retain flexibility to adjust production upwards as market conditions warrant
Slide 17: Optimize SG&A While Continuing to Invest Strategically
James Hardie Q3 FY23 Results OPTIMIZE SG&A WHILE CONTINUING TO INVEST STRATEGICALLY North America APAC Europe Optimize SG&A for Current Market Environment Continue to Strategically Invest in Growth Initiatives Invest in marketing and sales support strategically to effectively reach all members of
Slide 18: How We Are Managing Our Business
James Hardie Q3 FY23 Results HOW WE ARE MANAGING OUR BUSINESS North America APAC Europe Growth Above Growth Above Growth Above Volume Market Market Market Net Price Cost Per Unit SG&A Mid Single EBIT Margin 25+% 25+% Digits Page 18
Slide 19: James Hardie – A Global Growth Company
James Hardie Q3 FY23 Results JAMES HARDIE – A GLOBAL GROWTH COMPANY Strong Growth Opportunities Experienced Management Team Brand of Choice Strong Balance Sheet & Cash Generation Innovation Pipeline Attractive Returns Integrated Localized Supply Chain Premium Products and Services Multi‐Segment Focu
Slide 20: Questions
QUESTIONS
Slide 21: Appendix
APPENDIX
Slide 22: Building Sustainable Communities: Environmental, Social and Governance
James Hardie Q3 FY23 Results BUILDING SUSTAINABLE COMMUNITIES: ENVIRONMENTAL, SOCIAL AND GOVERNANCE Communities Environment Reduction in Scope 1 and Scope 2 greenhouse gas 75% of employees hired locally 21% intensity 1 (MT CO2e/$ revenue) in CY21 GOAL: 40% by 2030 Reduction in landfill waste intensi
Slide 23: Driving a Higher Value Product Mix – Average Net Sales Price
James Hardie Q3 FY23 Results DRIVING A HIGHER VALUE PRODUCT MIX – AVERAGE NET SALES PRICE North America APAC Average Net Sales Price Average Net Sales Price 1000 1,300 893 921 916 1,211 1,219 1,219 900 1,200 814 1,111 US$ per MSF A$ per MSF 1,100 1,056 800 1,027 745 718 725 992 1,000 700 900 600 800
Slide 24: General Corporate Costs and Research & Development
James Hardie Q3 FY23 Results GENERAL CORPORATE COSTS RESEARCH & DEVELOPMENT 100 30 86.9 25.3 81.6 25.2 80 20 US$ millions US$ millions 60 40 29.9 10 7.8 8.5 21.7 20 0 0 FY23 FY22 FY23 FY22 Q3 9 Months Q3 9 Months • Q3 corporate costs increased 38% vs pcp • Q3 R&D decreased 8% vs pcp • Driven primari
Slide 25: Operating Cash Flow and Capital Expenditures
James Hardie Q3 FY23 Results OPERATING CASH FLOW CAPITAL EXPENDITURES 750 500 450.7 636.5 661.8 553.3 400 1 US$ Millions US$ Millions 500 432.1 287.5 300 200 174.5 250 69.7 100 163.2 104.8 0 0 9 Month FY23 9 Month FY22 FY23 FY22 Non Capacity Capacity 9 Months TTM • YTD operating cash flows decreased
Slide 26: Liquidity Profile
James Hardie Q3 FY23 Results LIQUIDITY PROFILE Corporate debt structure • €400 million (US$425.7 million)2 3.625% senior unsecured notes, maturing 2026 (callable since October 2021) • US$400 million 5.00% senior unsecured notes maturing 2028 (callable in January 2023) 2 • US$600 million unsecured RC
Slide 27: Depreciation and Amortization
James Hardie Q3 FY23 Results DEPRECIATION AND AMORTIZATION US$ Millions Three and Nine Months Ended 31 December Q3 FY23 Q3 FY22 9 Months FY23 9 Months FY22 Depreciation and amortization North America Fiber Cement $ 32.1 $ 29.3 $ 94.1 $ 83.9 Asia Pacific Fiber Cement 3.2 3.1 9.2 9.8 Europe Building P
Slide 28: Asbestos Claims Data
James Hardie Q3 FY23 Results ASBESTOS CLAIMS DATA Nine months ended 31 December 2022: • Average claim settlement was 8% below actuarial estimates and 4% below pcp • Number of claims settled were 11% above actuarial estimates • Claims received were 4% above actuarial expectations and 10% above pcp •
Slide 29: Non-GAAP Financial Measures
James Hardie Q3 FY23 Results NON‐GAAP FINANCIAL MEASURES 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 Condensed
Slide 30: Non-GAAP Financial Measures
James Hardie Q3 FY23 Results NON‐GAAP FINANCIAL MEASURES Adjusted EBIT and Adjusted EBITDA US$ Millions Three and Nine Months Ended 31 December 9 Months 9 Months Q3'23 Q3'22 FY23 FY22 EBIT $ 162.9 $ 202.2 $ 610.8 $ 600.2 Asbestos: Asbestos adjustments loss (gain) 2.2 1.6 (19.5) (10.8) AICF SG&A expe
Slide 31: Non-GAAP Financial Measures
James Hardie Q3 FY23 Results NON‐GAAP FINANCIAL MEASURES Asia Pacific Fiber Cement Segment EBIT and EBITDA US$ Millions Three and Nine Months Ended 31 December 9 Months 9 Months Q3'23 Q3'22 FY23 FY22 Asia Pacific Fiber Cement Segment EBIT $ 27.6 $ 39.1 $ 102.5 $ 122.4 Asia Pacific Fiber Cement Segme
Slide 32: Non-GAAP Financial Measures
James Hardie Q3 FY23 Results NON‐GAAP FINANCIAL MEASURES Page 32
Slide 33: Non-GAAP Financial Measures
James Hardie Q3 FY23 Results NON‐GAAP FINANCIAL MEASURES Page 33
Slide 34: Q3 FY23 Management Presentation
Q3 FY23 MANAGEMENT PRESENTATION 14 February 2023
James Hardie Industries — Q3 FY2023 Earnings Presentation on 6ix