James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (October 2012)
35 slides from James Hardie Industries's investor presentation, Oct 10, 2012
Slide 1: Investor Presentation October 2012
Agenda For personal use only INVESTOR PRESENTATION October 2012
Slide 2: Disclaimer
For personal use only 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
Slide 3: Agenda
For personal use only AGENDA Business overview USA and Europe Fibre Cement Asia Pacific Fibre Cement Group Outlook Summary Appendix In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures inclu
Slide 4: James Hardie: A Growth Focused Company
For personal use only JAMES HARDIE: A GROWTH FOCUSED COMPANY Annual net sales US$1.2b Total assets US$1.7b Net cash US$265.4m Operations in North America, Asia Pacific and Europe 2,600 employees Market cap US$3.9b S&P/ASX 100 company NYSE ADR listing Note: Net sales, total assets and
Slide 5: Group Overview
For personal use only GROUP OVERVIEW The net operating result excluding asbestos, ASIC expenses, asset impairments and tax adjustments for the full year increased 20% to US$140.4 million 1 US$ Millions % FY 2012 FY 2011 Change Net operating profit (loss) 604.3 116.7 20 Net operating profit excluding
Slide 6: James Hardie – A World Leader in Fibre Cement
For personal use only JAMES HARDIE – A WORLD LEADER IN FIBRE CEMENT USA Fibre Cement Products Siding Soffit Fascia Trim Asia Pacific Fibre Cement Products Backerboard Residential siding Commercial exteriors Flooring Ceiling and internal walls 6
Slide 7: Global - Business Portfolio
For personal use only GLOBAL - BUSINESS PORTFOLIO 100% 90% 80% 70% 60% 77% 70% 67% 50% 40% 30% 20% 30% 33% 23% 10% 0% Volume Sales EBIT Volume Sales EBIT* USA and Europe Fibre Cement Asia-Pacific Fibre Cement * EBIT – Excludes Research and Development EBIT and Asbestos-related items 7
Slide 8: Fibre Cement – Superior Product Performance
For personal use only FIBRE CEMENT – SUPERIOR PRODUCT PERFORMANCE Fibre cement is more durable than wood and engineered wood, and looks and performs better than vinyl, and cheaper and quicker to build with than brick Fibre cement Vinyl Engineered wood ! Fire resistant ? ? ! Hail resistant ? ? ! Resi
Slide 9: Product Leadership Example – HardieZone System
For personal use only PRODUCT LEADERSHIP EXAMPLE – HARDIEZONE™ SYSTEM 7th Generation versus 2nd Generation generic fibre cement The HardieZone™ System represents a logical extension of Hardie technology 9
Slide 10: The USA Business – Largest Fibre Cement Producer in North America
For personal use only THE USA BUSINESS – LARGEST FIBRE CEMENT PRODUCER IN NORTH AMERICA Plant locations JH Plant Design Capacity Flat Sheet Capacity Plants (mmsf) • Tacoma, WA Plants operating Cleburne, Texas 500 Peru, IL Blandon, PA Peru, Illinois 560 Plant City, Florida 300 • Reno, NV Pulaski, Vir
Slide 11: US Exterior Cladding Market
11 For personal use only US EXTERIOR CLADDING MARKET Large growth opportunity 17% 38% 15% 6% Wood 24% Fibre Cement Stucco Bricks, Stone and Other Vinyl Note: 1) Market share figures reflect siding only; exclude fascia, soffits & trim; data reflects Repair & Remodel and New Construction markets, comb
Slide 12: USA Fibre Cement
USA FIBRE CEMENT For personal use only Rolling 12 month average of seasonally adjusted estimate of housing starts by US Census Bureau 12
Slide 13: USA and Europe Fibre Cement: EBIT and EBIT Margin
For personal use only USA AND EUROPE FIBRE CEMENT EBIT and EBIT Margin 1 140 35 120 30 EBIT MARGIN % 100 25 EBIT US$M 80 20 60 15 40 10 20 5 0 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 EBIT EBIT Margin 1 Excludes impairment charges of US$45.6 million in Q4 FY08 and US$14.3 million in Q4 FY12 13
Slide 14: USA and Europe Fibre Cement: Average Net Sales Price
For personal use only USA AND EUROPE FIBRE CEMENT Average Net Sales Price (US dollars) 680 US$647 640 600 560 520 US$ per MSF 480 440 400 360 FY06 FY07 FY08 FY09 FY10 FY11 FY12 14
Slide 15: Total USA Housing Starts – US Census
For personal use only TOTAL USA HOUSING STARTS – US CENSUS U.S. Housing Starts Calendar Quarters 600 30% 400 20% 200 10% (Thousands of Starts) 0 0% Q1`05 Q2`05 Q3`05 Q4`05 Q1`06 Q2`06 Q3`06 Q4`06 Q1`07 Q2`07 Q3`07 Q4`07 Q1`08 Q2`08 Q3`08 Q4`08 Q1`09 Q2`09 Q3`09 Q4`09 Q1`10 Q2`10 Q3`10 Q4`10 Q1`11 Q2
Slide 16: Asia Pacific Fibre Cement
For personal use only ASIA PACIFIC FIBRE CEMENT Five manufacturing plants in Asia Pacific Net sales US$376m EBIT US$80m Higher value differentiated products Lower delivered cost Growth model Asia Pacific manufacturing facilities. Net Sales and EBIT as at 31 March 2012. 16
Slide 17: Asia Pacific Fibre Cement – Examples
For personal use only ASIA PACIFIC FIBRE CEMENT – EXAMPLES Ceilings and partitions Exterior cladding Philippines Australia New Zealand Australia Interior 17 walls General purpose flooring 17
Slide 18: Capital Management
For personal use only 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$166.4 million The full year dividend from FY2012 earnings was US42.0 cents per security. The full year dividend was at the top e
Slide 19: Group Outlook
For personal use only GROUP OUTLOOK United States Some encouraging industry data points continued to emerge during the quarter, including increased stability of house values in recent months Early stages of a recovery in residential market appears to be underway The extent and rate of improvem
Slide 20: Summary
For personal use only SUMMARY We have a strong, well-established, growth-focused, strong cash-generating and high return business We have a sustainable competitive advantage Our model for strong growth is based on: – Large market opportunity – Superior value proposition – Proprietary and/or pr
Slide 21: Appendix
For personal use only Agenda APPENDIX
Slide 22: Global Strategy
GLOBAL STRATEGY For personal use only Industry leadership and profitable growth Aggressively grow demand for our products in targeted market segments Grow our overall market position while defending our share in existing market segments Introduce differentiated products to deliver a sustainabl
Slide 23: Key Ratios
* KEY RATIOS For personal use only FY2012 FY 2011 FY 2010 EPS (Diluted) 1, 3 32.1c 26.7c 30.5c Dividend Paid per share 4.0c N/A N/A Return on Shareholders’ Funds 1, 3 10.9% 10.0% 13.3% Return on Capital Employed 2, 3 20.4% 19.7% 17.4% EBIT/ Sales (EBIT margin) 2 15.3% 15.8% 18.6% Gearing Ratio 1 -24
Slide 24: USA and Europe Year Results Overview
For personal use only USA AND EUROPE 5 YEAR RESULTS OVERVIEW FY07 FY08 FY09 FY10 FY11 FY12 Net Sales 1,262 1,144 910 828 814 862 US$m Sales Volume 2,148 1,916 1,508 1,303 1,248 1,332 mmsf Average Price 588 597 604 635 652 647 US$ per msf EBIT 362 313 200 208 160 156 US$m EBIT Margin 29 27 22 25 20 1
Slide 25: Asia Pacific Year Results Overview
ASIA PACIFIC 5 YEAR RESULTS OVERVIEW For personal use only FY07 FY08 FY09 FY10 FY11 FY12 Net Sales 223 298 273 296 353 376 US$m Sales Volume 390 398 390 389 407 392 mmsf Average Price 842 862 879 894 916 916 US$ per msf EBIT 39 50 47 58 79 79 US$m EBIT Margin 16 17 17 20 23 21 % 25
Slide 26: Endnotes
For personal use only ENDNOTES This Management Presentation forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including the Management’s Analysis of Results, Media Release and Consolidated Financial Statements.
Slide 27: Endnotes (continued)
For personal use only ENDNOTES (CONTINUED) Sales Volumes mmsf – million square feet, where a square foot is defined as a standard square foot of 5/16” thickness. msf – thousand square feet, where a square foot is defined as a standard square foot of 5/16” thickness. Financial Ratios Gearing Ratio –
Slide 28: Results – Q1
For personal use only RESULTS – Q1 US$ 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) - Othe
Slide 29: Non-US GAAP Financial Measures
For personal use only 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 mar
Slide 30: Non-US GAAP Financial Measures (continued)
For personal use only 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 considere
Slide 31: Non-US GAAP Financial Measures (continued)
For personal use only 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 financia
Slide 32: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) For personal use only 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 effec
Slide 33: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) For personal use only 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 profita
Slide 34: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) For personal use only 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
Slide 35: For personal use only
Agenda For personal use only INVESTOR PRESENTATION October 2012
James Hardie Industries — Investor Presentation (October 2012) on 6ix