James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q4 FY23 Earnings Presentation
37 slides from James Hardie Industries's earnings presentation, May 16, 2023
Slide 1: Q4 FY23 Management Presentation
Q4 FY23 MANAGEMENT PRESENTATION 16 May 2023
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q4 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 Q4 FY23 Results AGENDA • Operations and Strategy Update Aaron Erter CEO • Q4 FY23 Financial Results • Guidance and Outlook • Questions and Answers Jason Miele CFO Page 3
Slide 4: Operations and Strategy Update
OPERATIONS AND STRATEGY UPDATE
Slide 5: FY23 Highlights: Managing Decisively to Deliver Differentiated Results
James Hardie Q4 FY23 Results FY23 HIGHLIGHTS Record FY23 Results • Record Net Sales of US$3.8 Billion Globally: North America: Record Net Sales of US$2.8 Billion APAC: Record Net Sales of A$787.0 Million Europe: Record Net Sales of €431.8 Million • Record EBIT of US$767.5 Million in North Amer
Slide 6: Managing Decisively Through the Downturn
James Hardie Q4 FY23 Results MANAGING DECISIVELY THROUGH THE DOWNTURN 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 Page 6
Slide 7: Global Strategic Framework
James Hardie Q4 FY23 Results GLOBAL STRATEGIC FRAMEWORK Homeowner Focused, Customer and Contractor Driven™ Strategic Initiatives Enabled by Profitably grow and take share where we Customer Integration 1 have the right to win Innovative Solutions Bring our customers high valued, 2 differentiated solu
Slide 8: Growth Opportunity Driven by Our Superior Value Proposition
James Hardie Q4 FY23 Results GROWTH OPPORTUNITY DRIVEN BY OUR SUPERIOR VALUE PROPOSITION Superior Value Proposition Exterior Design Superior Durability Low-Maintenance Trusted Brand Unrivaled Business Support Localized Manufacturing Page 8
Slide 9: Q4 FY23 Financial Results
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Slide 10: Global Results
James Hardie Q4 FY23 Results GLOBAL RESULTS Strong Full Year FY23 Results Q4 FY23 FY23 • Record Net Sales 1,061.4 mmsf 4,464.7 mmsf Sales Volume • Strong Adjusted Net Income of US$605.5 million -13% -5% • Strong Operating Cash Flow of US$607.6 million US$917.8 M US$3,777.1 M Net Sales • Adjusted EBI
Slide 11: North America Summary
James Hardie Q4 FY23 Results NORTH AMERICA SUMMARY Strong Full Year FY23 Results Q4 FY23 FY23 • Record Net Sales of US$2.8 billion 703.6 mmsf 3,038.5 mmsf Sales Volume • Record Average Net Sales price of US$912/msf -14% -2% • Record EBIT of US$767.5 million Price/Mix +8% +11% • EBIT Margin of 27.5%
Slide 12: APAC Summary
James Hardie Q4 FY23 Results APAC SUMMARY Strong Full Year FY23 Results Q4 FY23 FY23 • Record Net Sales of A$787.0 million 145.4 mmsf 577.2 mmsf Sales Volume • Record Average Net Sales price of A$1,228/msf -10% -9% • EBIT Margin of 26.5% Price/Mix +12% +10% A$204.6 M A$787.0 M Closed FY23 with a str
Slide 13: Europe Summary
James Hardie Q4 FY23 Results EUROPE SUMMARY Q4 FY23 FY23 Strong Full Year FY23 Results 212.4 mmsf 849.0 mmsf • Record Net Sales of €431.8 million Sales Volume -12% -11% • Record Average Net Sales price of €400/msf Price/Mix +14% +14% • EBIT Margin of 5.8% €117.8 M €431.8 M Net Sales Closed FY23 with
Slide 14: Liquidity, Cash Flow, Capital Allocation & Capital Expenditure
James Hardie Q4 FY23 Results LIQUIDITY, CASH FLOW, CAPITAL ALLOCATION & CAPITAL EXPENDITURE Liquidity Capital Allocation • US$475.8 million of liquidity at 31 March 2023 Framework • Invest in Organic Growth • 0.99x leverage ratio at 31 March 2023 • Maintain Flexible Balance Sheet • Strong liquidity
Slide 15: Guidance, Outlook and Closing
GUIDANCE, OUTLOOK AND CLOSING
Slide 16: Entering FY24 in a Position of Strength
James Hardie Q4 FY23 Results ENTERING FY24 IN A POSITION OF STRENGTH We Have Fine-tuned our Strategy With a Reinvigorated Focus on Profitable Share Gain We Closed FY23 Strong, Enabling Continued Investment in Growth With Excellent Returns NA Q4 EBIT Margin: 29.0%, up 200 bps from Q3 APAC Q4 EBIT
Slide 17: Guidance: Q1 Fiscal Year 2024
James Hardie Q4 FY23 Results GUIDANCE: Q1 FISCAL YEAR 2024 North America 680 – 710 million standard feet Volume North America 28% - 30% EBIT Margin Adjusted Net US$ 145 – 165 million Income Positioned for a Strong First Quarter Page 17
Slide 18: FY24 Market Outlook: North America
James Hardie Q4 FY23 Results FY24 MARKET OUTLOOK: NORTH AMERICA External Range Our View US Single Family New Construction -10% to -23% Calendar 2023 Growth Outlook1 -17% to -23% Average: -17% External Range Our View US Multi Family New Construction -8% to -25% Calendar 2023 Growth Outlook2 -16% to -
Slide 19: North America – FY24 Quarterly Volume Sensitivity
James Hardie Q4 FY23 Results NORTH AMERICA – FY24 QUARTERLY VOLUME SENSITIVITY Quarterly Volume Scenarios 700 mmsf 650 mmsf 600 mmsf Estimated Quarterly EBIT Margin (%) 28 – 30% 26 – 28% 25 – 27% Given the uncertain nature of the US housing market, we have modeled our expected quarterly EBIT margin
Slide 20: How We Are Managing Our Business in FY24
James Hardie Q4 FY23 Results HOW WE ARE MANAGING OUR BUSINESS IN FY24 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 20
Slide 21: James Hardie – A Global Growth Company
James Hardie Q4 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 22: Questions
QUESTIONS
Slide 23: Appendix
APPENDIX
Slide 24: Building Sustainable Communities: Environmental, Social and Governance
James Hardie Q4 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 25: Average Net Sales Price
James Hardie Q4 FY23 Results AVERAGE NET SALES PRICE North America APAC Average Net Sales Price Average Net Sales Price 1000 912 1,300 1,228 900 1,200 814 1,111 A$ per MSF US$ per MSF 1,100 1,056 800 1,027 745 718 725 992 1,000 700 900 600 800 500 700 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY2
Slide 26: General Corporate Costs and Research & Development
James Hardie Q4 FY23 Results GENERAL CORPORATE COSTS RESEARCH & DEVELOPMENT 140 40.0 123.7 34.4 120 114.9 33.3 100 30.0 US$ millions US$ millions 80 20.0 60 42.1 40 28.0 8.0 9.2 10.0 20 0 0.0 FY23 FY22 FY23 FY22 Q4 12 Months Q4 12 Months • Q4 corporate costs increased 50% vs pcp due to • Q4 R&D decr
Slide 27: Operating Cash Flow and Capital Expenditures
James Hardie Q4 FY23 Results OPERATING CASH FLOW CAPITAL EXPENDITURES 1,000 700 591.3 786.9 600 757.2 750 500 1 607.6 US$ Millions US$ Millions 400 378.4 500 451.2 300 257.8 304.0 200 96.2 250 100 212.9 161.6 0 0 FY23 FY22 FY19 FY20 FY21 FY22 FY23 Non Capacity Capacity • YTD operating cash flows dec
Slide 28: Liquidity Profile
James Hardie Q4 FY23 Results LIQUIDITY PROFILE Corporate debt structure • €400 million (US$436.1 million)2 3.625% senior unsecured notes, maturing 2026 (callable since October 2021) • US$400 million 5.00% senior unsecured notes maturing 2028 (callable since January 2023) 2 • US$600 million unsecured
Slide 29: Depreciation and Amortization
James Hardie Q4 FY23 Results DEPRECIATION AND AMORTIZATION US$ Millions Three Months and Full Year Ended 31 March Q4 FY23 Q4 FY22 FY23 FY22 Depreciation and amortization North America Fiber Cement $ 32.0 $ 30.5 $ 126.1 $ 114.4 Asia Pacific Fiber Cement 5.5 3.8 14.7 13.6 Europe Building Products 7.4
Slide 30: Asbestos Compensation
James Hardie Q4 FY23 Results ASBESTOS COMPENSATION KEY POINTS 1 • Updated actuarial report completed as of 31 March 2023 • Undiscounted and uninflated estimate decreased from A$1,390 million to A$1,335 million • For fiscal year 2023, we noted the following related to asbestos-related claims experien
Slide 31: Asbestos Claims Data, Liability and Cash Movements
James Hardie Q4 FY23 Results ASBESTOS CLAIMS DATA, LIABILITY AND CASH MOVEMENTS Net Post-Tax Unfunded Liability 750 579.4 534.5 500 433.5 358.7 250 0 FY23 FY22 A$ Million US$ Million AICF Cash and Investments – 31 March 2023 (A$ Millions) 364.7 349.7 31 Mar 2023 31 Mar 2022 1 Average claim settlemen
Slide 32: Non-GAAP Financial Measures
James Hardie Q4 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 Consolida
Slide 33: Non-GAAP Financial Measures
James Hardie Q4 FY23 Results NON-GAAP FINANCIAL MEASURES Page 33
Slide 34: Non-GAAP Financial Measures
James Hardie Q4 FY23 Results NON-GAAP FINANCIAL MEASURES Page 34
Slide 35: Non-GAAP Financial Measures
James Hardie Q4 FY23 Results NON-GAAP FINANCIAL MEASURES Page 35
Slide 36: Non-GAAP Financial Measures
James Hardie Q4 FY23 Results NON-GAAP FINANCIAL MEASURES Page 36
Slide 37: Q4 FY23 Management Presentation
Q4 FY23 MANAGEMENT PRESENTATION 16 May 2023
James Hardie Industries — Q4 FY23 Earnings Presentation on 6ix