James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Goldman Sachs JBWere Australasian Investment Forum, London, September 2008
25 slides from James Hardie Industries's conference presentation, Sep 11, 2008
Slide 1: Goldman Sachs JBWere Australasian Investment Forum
For personal use only Goldman Sachs JBWere Australasian Investment Forum London, September 2008 Text goes here James Hardie Agenda A growth focused company Annual net sales US$1,469m million Total assets US$2,180m Operations in North America, Asia Pacific and Europe 2,700 employees Market
Slide 2: Investment attributes
Text goes here Focused Agenda on Fibre Cement For personal use only Investment attributes Growth focused Sustainable competitive advantage Unique proprietary technology Strong financial performance, cash flows and balance sheet¹ Track record of outperforming US housing market ¹ Excluding a
Slide 3: Industry leadership and profitable growth
Text goes here Agenda Industry leadership and profitable growth For personal use only Strategy Aggressively grow primary demand for fibre cement Secure differentiated position Generate strong top line growth Win high shares of large segments Sustain attractive margins 5 Text goes here Busi
Slide 4: USA Fibre Cement – quick history
Text goes here USA Fibre Cement – quick history Agenda For personal use only 1990 – 1995 Entered US in 1990 to manufacture and market roofing shakes (one line, one plant) Shifted target market from roofing to siding Moved to high throughput, low unit cost manufacturing strategy Revenue growt
Slide 5: USA Fibre Cement sustainable competitive advantage
Text goes here USA Fibre Cement Agenda 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
Slide 6: USA Fibre Cement sales mix and US siding market
USA Text Fibre Cement – (FY09 est.) sales mix1 goes here Agenda For personal use only New Construction vs. Repair and Remodel New Construction R&R Total Sales 57% 43% Exteriors products 67% 33% Interior products 25% 75% Exterior vs. Interior Products Exteriors Interiors Volume 75% 25% Revenue 81% 19
Slide 7: Understanding the Repair and Remodel market
Text goes here Agenda Understanding 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 – 6.4 billion square feet (2007 est) All market and market share figures are management estimate
Slide 8: Superior product performance – continued
Text goes here Superior Agenda product performance – continued For personal use only Fibre Cement looks and performs better than vinyl Fibre Vinyl cement ! Fire resistant ? ! Hail resistant ? ! Resists warping ? ! Resists buckling ? ! Colour lasts longer ? ! Dimensional stability ? ! Can be repainte
Slide 9: Interior products and largest producer in North America
Text goes here Interior Agenda products – continued For personal use only Attributes Protection against moisture damage and mould growth (total wet area solution) Strength Highest compressive and flexural strength available Workability Cleaner and less abrasive than glass mesh Low densit
Slide 10: Low cost fibre cement producer
Text goes here Agenda Low cost fibre cement producer For personal use only PRODUCTION CAPACITY PER LINE CAPITAL COST PER UNIT OF CAPACITY (US$/SF) 350.1 0.4 3001 300.1 0.35 250.1 0.3 200 $US / SF MMSF 200.1 0.25 150 150.1 100 0.2 100.1 60 0.15 50.1 0.1 0.1 1990 1994 1998 2001 2006 FY91 FY96 FY97 FY9
Slide 11: Organisational focus: product leadership
Text goes here Organisational Agenda 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 strengthe
Slide 12: ColorPlus Model
Text goes here ColorPlus® Agenda 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 Installer education Channel inc
Slide 13: Product leadership – examples
Text goes here Organisational Agenda focus For personal use only Product leadership – examples USA Fibre Cement: ArtisanTM Lap (thicker siding, provides distinctive shadow lines) premium product launched in Atlanta wider launch during 2008 HardieWrapTM 25 Text goes here Organisational Agen
Slide 14: Changing US product mix
Text goes here Organisational Agenda focus For personal use only Changing US product mix Product mix will evolve significantly in the medium term to continue to drive revenue and leverage market position Today Tomorrow ColorPlus Next Generation HardiePlank Hardieplank/ ColorPlus Cemplank Cemplank Fi
Slide 15: Response to US housing downturn
Text goes here Response Agenda to US housing downturn For personal use only Focus on primary demand growth and cost management Business re-sets in late 2006/early 2007 and again in April 2008: production re-scheduled to balance supply and demand corporate-wide review of activities, projects
Slide 16: USA Fibre Cement primary growth performance
USA Text Fibre Cement goes here Agenda For personal use only Primary growth performance 30% 20% 10% 0% 4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 10 20 30 40 10 20 30 40 10 20 30 40 10 20 30 40 10 20 30 40 10 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q -10% -20% -30% %JHBP Growth % NC/R&R Growth Rollin
Slide 17: USA Fibre Cement EBIT and EBIT margin
USA Text Fibre Cement goes here Agenda For personal use only EBIT and EBIT Margin* 140 35 120 30 100 25 EBIT MARGIN % 80 20 EBIT US$M 60 15 40 10 20 5 0 0 FY02 FY03 FY04 Q1 FY05 Q1 FY06 Q1 FY07 Q1 FY08 Q1 FY09 EBIT EBIT/Sales *Excludes restructuring and other operating expenses of US$12.6 million in
Slide 18: Long term financial targets
Text goes here Long term financial targets Agenda For personal use only Targeting high growth and attractive returns Target¹ Actual Actual Actual Actual Actual FY08 FY07 FY06 FY05 FY04 Revenue Growth > 15% pa (5)% 4% 23% 23% 25% EBIT Margin* > 15% pa 19% 22% 21% 19% 18% Return on Capital > 15% pa 24
Slide 19: Q1 FY09 – results overview
Text goes here Q1Agenda FY09 – results overview For personal use only Key ratios Q1’ FY09 FY08 FY07 EPS (Diluted)1 9.6c 36.9c 49.3c Dividend Paid per share - 27.0c 9.0c Return on Shareholders’ Funds1 19.9% 17.7% 24.0% Return on Capital Employed2 21.9% 24.2% 27.7% EBIT/ Sales (EBIT Margin)2 17.5% 19.
Slide 20: Corporate issues and challenges
Text goes here Corporate Agenda issues and challenges - continued For personal use only ASIC: ASIC proceedings associated with establishment of Medical Research and Compensation Foundation in 2001, and subsequent events; substantive court proceedings to start 29 September 2008 On 4 September 2
Slide 21: Endnotes
Text goes here Endnotes Agenda For personal use only This Management Presentation contains forward-looking statements. We may from time to time make forward-looking statements in our periodic reports filed with or furnished to the United States Securities and Exchange Commission on Forms 20-F and 6-
Slide 22: Endnotes – Financial Ratios and Non-US GAAP Measures
Text goes here Endnotes Agenda 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 int
Slide 23: Non-US GAAP Financial Measures (continued)
Text goes here Endnotes Agenda For personal use only Non-US GAAP Financial Measures (continued) Net operating profit excluding asbestos – Net operating profit excluding asbestos is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than net income
Slide 24: Non-US GAAP Financial Measures (continued)
Text goes here Endnotes Agenda For personal use only Non-US GAAP Financial Measures (continued) Effective tax rate excluding asbestos – Effective tax rate excluding asbestos is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than effective tax
Slide 25: Goldman Sachs JBWere Australasian Investment Forum
For personal use only Goldman Sachs JBWere Australasian Investment Forum London, September 2008 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 section of this document