James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Citi Inaugural Australian Investment Conference 2009
24 slides from James Hardie Industries's conference presentation, Oct 21, 2009
Slide 1: Citi Inaugural Australian Investment Conference
Citi Inaugural Australian Investment Conference19-20 October 2009Sean O'SullivanVP - Investor & Media Relations
Slide 2: Disclaimer
2 Disclaimer This 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-K, in our annual reports to shareholders, in offeri
Slide 3: Agenda
3 Operations, strategy and performanceUSA and Europe Fibre CementAsia Pacific Fibre CementOrganisational focus Financial history Corporate issues Summary Agenda In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financi
Slide 4: James Hardie: a growth focused company
4 Annual net sales US$1.2bTotal assets US$1.9bOperations in North America, Asia Pacific and Europe2,300 employeesMarket cap US$3.04bS&P/ASX 100 companyNYSE listing Note: Net sales and total assets are at 31 March 2009 James Hardie: a growth focused company
Slide 5: Global strategy
5 Aggressively grow demand for our products in targeted market segmentsGrow our overall market position while defending our share in existing market segments Offer products with superior value to that of our competitorsIntroduce differentiated products to deliver a sustainable competitive advantage
Slide 6: Superior product performance
6 Fibre cement is more durable than wood and engineered wood, and looks and performs better than vinyl Vinyl Fire resistantHail resistantResists warpingResists bucklingColour lasts longerDimensional stabilityCan be repaintedHail resistant ???????? ???????? Fibre cement USA and Europe Fibre Cement En
Slide 7: Business portfolio
7 Business portfolio At and for the ended ended 31 March 2009* Total Identifiable Assets - Excludes General Corporate, Research and Development and Asbestos-related items** EBIT - Excludes Research and Development EBIT and Asbestos-related items USA and Europe Fibre Cement (Established High Growth/H
Slide 8: Exterior products - US siding market
8 Exterior products - US siding market Large growth opportunity 2007* * NAHB Sources: Builder Practices 2007 Report - Siding Usage/Exterior Wall Finish in New Construction (adjusted) Consumer Practices 2007 Report- Siding Usage/Exterior Wall Finish In Repair & Remodel (13% reported growth, factored
Slide 9: Sales mix: New Construction vs. Repair and Remodel
9 USA and Europe Fibre Cement - sales mix New Construction vs. Repair and Remodel New Construction R&R Total Sales 35% 65% Exterior Products 39% 61% Interior Products 25% 75% Exterior vs. Interior Products Exteriors Interiors Volume 75% 25% Revenue 80% 20% All market and market share figures are man
Slide 10: Primary Growth Performance
10 10 USA and Europe Fibre Cement Primary Growth Performance Sources: Dodge US addressable starts (SF & MF-low); US Census R&R $ expenditures less CPINote: • US Census discontinued their R&R $ expenditures report in 2007 • 2008 R&R = avg. published Home Depot & Lowe's same store sales less CPI
Slide 11: Average Net Selling Price
11 11 Average Net Selling Price US$ per MSF USA and Europe Fibre Cement 380 420 460 500 540 580 620 FY04 FY05 FY06 FY07 FY08 FY09 Q1 FY10 US$625
Slide 12: Revenue growth streams
12 Exterior productsSidingSoffitFasciaTrimInterior products 1/4 inch backerboardHardiebacker 500(r) Total net sales compound annual growth rate of 17% for interior products and4% for exterior products (FY00 - FY09). USA and Europe Fibre Cement - revenue growth streams
Slide 13: Organisational focus - ColorPlus
13 Product leadership - examples in USA and Europe Fibre Cement:ColorPlus(r) Collection (pre-painted siding and trim):Driving growth against vinyl in Northern DivisionLaunched in Western and Southern Divisions FY07 Organisational focus - ColorPlus(r)
Slide 14: Organisational focus - ColorPlus Model
14 Higher quality products with higher revenue streamStrategy designed to reduce 'on the wall' cost and close gap with vinyl sidingSupply of pre-painted exterior productsReduce supply chain costsInstaller educationChannel increases revenue base and gains incremental volumeEnd-user gets higher qualit
Slide 15: Organisational focus - HardieZone System
15 15 Our finest siding ever Engineered for Climate(tm)Highest protection from the elementsSustained beauty with less maintenanceHigher customer satisfactionDifferentiation from generic fibre cementSeven strategically located manufacturing facilitiesThe warranty homebuyers have been asking for Our b
Slide 16: 7th Generation versus 2nd Generation generic fibre cement
16 16 7th Generation versus 2nd Generation generic fibre cementThe HardieZone(tm) System represents a logical extension of Hardie technology Organisational focus - HardieZone(tm) System
Slide 17: Response to US housing downturn
17 Focus on primary demand growth and cost managementBusiness re-sets in late 2006/early 2007; in April 2008; and in November 2008:production re-scheduled to balance supply and demand production suspended at Blandon PA, Summerville SC plants and Fontana CA corporate-wide review of activities, projec
Slide 18: Largest fibre cement producer in North America
18 Flat Sheet Plants Capacity (mmsf) Plants operating at September 2009 Cleburne, Texas 500 Peru, Illinois 560 Plant City, Florida 300 Pulaski, Virginia 600 Reno, Nevada 300 Tacoma, Washington 200 Waxahachie, Texas 360 Plants suspended at September 2009 Blandon, Pennsylvania1 200 Fontana, California
Slide 19: EBIT and EBIT Margin
19 19 USA and Europe Fibre Cement 0 20 40 60 80 100 120 140 FY04 Q1 FY05 Q1 FY06 Q1 FY07 Q1 FY08 Q1 FY09 Q1 FY10 EBIT US$M 0 5 10 15 20 25 30 35 EBIT MARGIN % EBIT EBIT/Sales EBIT and EBIT Margin* * Excludes impairment charges of US$45.6 million in Q4 FY08
Slide 20: Asia Pacific Fibre Cement
20 Five manufacturing plants in Asia Pacific FY09 net sales US$52.6m FY09 EBIT US$6.7mHigher value differentiated productsLower delivered costShift to growth modelPhilippines focus on profitability Asia Pacific Fibre Cement
Slide 21: Corporate issues
21 Current statusAsbestos compensation agreement - negotiated 2004 - 2006, resolved early 2007Australian tax issue - FY 2002-2006, resolved 2008IRS - 2006 - 2007, resolved 2009 ASIC proceedings - decision on exoneration, penalties and costs delivered August 2009Future domicile - expect resolution la
Slide 22: Outlook
22 22 OutlookWhile the US residential construction market appears to be "nearing the bottom", it remains too early to ascertain the timing, rate or extent of any recoveryThe market is facing continuing challenges, including:excess supply of existing housing stock; restricted access to credit for pot
Slide 23: Summary
23 We have a strong, well established, growth focused and high return businessWe have a sustainable competitive advantageOur model for strong growth is based on:Large market opportunitySuperior value propositionProprietary and/or protected technologyUpsides due to current R&D investments Significant
Slide 24: Financial Measures - US GAAP equivalents
24 24 Financial Measures - US GAAP equivalentsEBIT and EBIT Margin - EBIT, as used in this document, is equivalent to the US GAAP measure of operating income. EBIT margin is defined as EBIT as a percentage of net sales. We believe EBIT and EBIT margin to be relevant and useful information as these a
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