James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (June 2018)
170 slides from James Hardie Industries's investor presentation, Jun 25, 2018
Slide 1: James Hardie International
For personal use only James Hardie International Jack Truong, President – International Asia Pacific Investor & Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 2: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 3: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 4: Agenda
AGENDA For personal use only • International Strategy • James Hardie Europe • James Hardie Asia Pacific PAGE 4
Slide 5: International Strategy
INTERNATIONAL STRATEGY For personal use only North America International R&D Centers Manufacturing Facilities PAGE 5
Slide 6: International Priorities
INTERNATIONAL PRIORITIES For personal use only EU: Integrate Fermacell and Transform EU into 1B Euro Business in 10 years APAC: Continue to Make Current Business a Great Business North America International R&D Centers Manufacturing Facilities PAGE 6
Slide 7: Agenda
AGENDA For personal use only • International Strategy • James Hardie Europe • James Hardie Asia Pacific PAGE 7
Slide 8: Strategic Rationale of Fermacell Acquisition for JH Europe
Strategic Rationale of Fermacell Acquisition for JH Europe For personal use only • Critical mass Scale • Local R&D capabilities • Quality products Quality • Strong brand Company • Profitable growth trend • Technical pull-through selling Fit w/ JH • High category share Source: Euroconstruct (as of No
Slide 9: James Hardie Europe Transformation
James Hardie Europe Transformation For personal use only Before Acquisition Post Acquisition Workforce • 70 employees • 900+ employees Presence • UK, FR, DK, DE • 12+ countries Segments • Residential New Construction • Residential New Construction • Repair and Renovation • Repair and Renovation • Co
Slide 10: Brand Architecture
Brand Architecture For personal use only PAGE 10
Slide 11: Value Proposition of Fiber Gypsum
Value Proposition of Fiber Gypsum For personal use only FROM: TWO Layers (OSB + Drywall) Fiber Gypsum is the Best All-Around Board Drywall Acoustic Impact OSB Fire Resistance Moisture Shear TO: ONE Layer of Fiber Gypsum Hanging Strength • Over 200 sales professionals throughout Europe wi
Slide 12: Fiber Gypsum Products & Applications
Fiber Gypsum Products & Applications Fiber Gypsum – Timber Frame For personal use only Fiber Gypsum - Flooring Timber Frame, Germany Elementary School, Germany PAGE 12
Slide 13: Fiber Cement Products & Applications
Fiber Cement Products & Applications Fiber Cement – HardiePlanks Fiber Cement – HardiePanel Fiber Cement – HardieBacker For personal use only Timber Frame, UK Multi Family, France Wet Room application PAGE 13
Slide 14: Cement Bonded Products & Applications
Cement Bonded Products & Applications For personal use only Cement Bonded Board – Fire Protection Elbe Tunnel Hamburg, Germany NSBP Tunnel Brisbane, Australia 14 PAGE 14
Slide 15: Fermacell Manufacturing Footprint
Fermacell Manufacturing Footprint For personal use only Wijchen Calbe Münchehof Orejo Siglingen Countries with own salesforce (excl. UAE) PAGE 15
Slide 16: James Hardie Europe - year objective
James Hardie Europe - 10 year objective SHORT TERM For personal use only • Integrate Long Term • Grow Fiber Gypsum • Grow Fiber Cement in timber frame market • Improve Fiber Gypsum Manufacturing Medium Term • Develop growth strategy for Fiber Cement in the masonry construction market MEDIUM TERM • A
Slide 17: Agenda
AGENDA For personal use only • International Strategy • James Hardie Europe • James Hardie Asia Pacific PAGE 17
Slide 18: James Hardie Asia Pacific
James Hardie Asia Pacific For personal use only ZERO HARM AT THE CORE OF OUR STRATEGY Australia • Continue to grow above market with strong focus on demand generation, new product launches, and operational excellence New Zealand • Continue to gain share with focus on demand generation and operationa
Slide 19: International Consistently Delivers Strong Returns
International Consistently Delivers Strong Returns Quarterly EBIT and EBIT Margin For personal use only 35 30 25 20 15 10 5 0 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 FY2012 FY2013 FY2013 FY2014 FY2014 FY2015 FY2015 FY2016 FY2016 FY2017 FY2017 FY2018 FY2018 in millions USD EBIT EBIT Margin PAGE 19
Slide 20: International Priorities
INTERNATIONAL PRIORITIES For personal use only EU: Integrate Fermacell and Transform EU into 1B Euro Business in 10 years APAC: Continue to Make Current Business a Great Business North America International R&D Centers Manufacturing Facilities PAGE 20
Slide 21: Questions
For personal use only QUESTIONS
Slide 22: James Hardie Asia Pacific
For personal use only James Hardie Asia Pacific Conrad Groenewald, General Manager – Asia Pacific Asia Pacific Investor & Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 23: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 24: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 25: Agenda
AGENDA For personal use only 1. APAC in Context 2. Market Segments 3. Vision and Strategic Pillars 4. What you will see and hear 5. Questions? PAGE 4
Slide 26: Asia Pacific in Context
ASIA PACIFIC IN CONTEXT For personal use only PAGE 5
Slide 27: APAC Segment Coverage
APAC SEGMENT COVERAGE For personal use only Renovation Single Medium Medium High Ultra High Detached Density Density Density Density (Townhouses) (Up to 3 levels) (4‐12 Levels) ( >12 Storey) AU NZ PH PAGE 6
Slide 28: APAC Vision and Strategic Pillars
APAC VISION AND STRATEGIC PILLARS For personal use only PAGE 7
Slide 29: Zero Harm at the Core of Our Strategy
ZERO HARM AT THE CORE OF OUR STRATEGY For personal use only Safe People Safe Places Safe Systems • Everyone at JH is a Safety • 5S and housekeepingvisibly • Safety integrated intoevery Leader demonstrates Zero Harm function across the business • Every employee in the • Engineering controls are busin
Slide 30: Smart, Driven & Real People
SMART, DRIVEN & REAL PEOPLE For personal use only SMART, DRIVEN & REAL PEOPLE Invest in the development and growth of our people MARKET LED Grow fiber cement market share in all geographies through superior insights that solve market problems and anticipate demand. CORPORATE CONSCIENCE WORLD CLASS M
Slide 31: Smart, Driven and Real People
SMART, DRIVEN AND REAL PEOPLE For personal use only All employees have a connection to our strategy….. PAGE 10
Slide 32: Smart, Driven and Real People
SMART, DRIVEN AND REAL PEOPLE For personal use only Structured for Sustainable, Profitable Run the Business Growth Regional Management Team JHAU JHNZ JHPH JHS Future BUs Improve the Business Manufacturing Improvement Lead Finance & IT Zero Harm Coach People & Performance Procurement Supply Chain Sup
Slide 33: Smart, Driven and Real People
SMART, DRIVEN AND REAL PEOPLE For personal use only Leveraging both internal and external programs across the industry 2016 program – 30 people 2017 program – 35 people PAGE 12
Slide 34: Smart, Driven and Real People
SMART, DRIVEN AND REAL PEOPLE For personal use only Our Manufacturing Graduate program has been highly successful in creating future technical expertise and leadership within our manufacturing network Manufacturing Business Manufacturing Market Operations & Orientation Operations Understanding Key P
Slide 35: World Class Manufacturing
WORLD CLASS MANUFACTURING For personal use only SMART, DRIVEN & REAL PEOPLE Invest in the development and growth of our people INNOVATIVE SOLUTIONS CUSTOMER MARKET LED LED Maintain industry leadership through Grow fiber cement market share in all innovative solutions delivering customer, geographies
Slide 36: World Class Manufacturing: Hardie Advantage
WORLD CLASS MANUFACTURING For personal use only Hardie Advantage PAGE 15
Slide 37: World Class Manufacturing
WORLD CLASS MANUFACTURING For personal use only How we Operate: Hardie Advantage: • Standard work • Lead and Operating System: • Leaders Standard Manage Change work • System to “Run” the business • System to “Improve” the business Act Plan Practices to LOCK‐in results: • Standard work • Leaders stan
Slide 38: Strategy on Investment - Capacity
WORLD CLASS MANUFACTURING For personal use only Strategy on Investment ‐ Capacity 3. Incremental Capacity addition 2. Debottlenecking ‐ Carole Park Phase 1 Capacity ‐ Philippines 2nd line 1. Optimisation of ‐ Bottleneck projects ‐ Carole Park Phase 2 Existing Capacity ‐ Current Assets ‐ Maximise Eff
Slide 39: Market Led
MARKET LED For personal use only SMART, DRIVEN & REAL PEOPLE Invest in the development and growth of our people INNOVATIVE SOLUTIONS MARKET LED Maintain industry leadership through Grow fiber cement market share in all innovative solutions delivering customer, geographies through superior insights e
Slide 40: Market Led: Best in Industry Insights
MARKET LED For personal use only Best in Industry Insights: Consumers Developer / Builders & Trades Designers /Architects Australia 2,000 1,000 1,500 New Zealand 500 1,500 500 JHS ‐ 100 500 Philippines 400 300 800 PAGE 19
Slide 41: Insights into Action: EPIC path to purchase
MARKET LED For personal use only Insights into Action: EPIC path to purchase ENVY POSSIBILITY INVESTIGATE COMMITMENT INSPIRE PEOPLE TO WANT THE LOOK GIVE THE PERSON DOING THE JOB MAKE IT EASY CONFIDENCE PAGE 20
Slide 42: Innovative Solutions
INNOVATIVE SOLUTIONS For personal use only SMART, DRIVEN & REAL PEOPLE Invest in the development and growth of our people INNOVATIVE SOLUTIONS CUSTOMER LED Maintain industry leadership through Grow fiber cement market share in all innovative solutions delivering customer, geographies through superio
Slide 43: Innovation Stage Gate Process
INNOVATIVE SOLUTIONS For personal use only Innovation Stage Gate Process: New pathways and stage gates to commercialize new products and systems in market, sooner • Captures and drives insights through to commercial reality • Consistent Global Process • Drives integration between Business Units • Pa
Slide 44: Responsible Business
RESPONSIBLE BUSINESS For personal use only SMART, DRIVEN & REAL PEOPLE Invest in the development and growth of our people INNOVATIVE SOLUTIONS CUSTOMER LED Maintain industry leadership through Grow fiber cement market share in all innovative solutions delivering customer, geographies through superio
Slide 45: Responsible Business
RESPONSIBLE BUSINESS For personal use only THE VISION THE FRAMEWORK Double the business while achieving sustainable growth and building better futures THE ROADMAP Provide transparent Create reporting active Integrate partnerships strategies (shared Engage RMT across the and value) Define BBF region
Slide 46: APAC Vision and Strategic Pillars
APAC VISION AND STRATEGIC PILLARS For personal use only PAGE 25
Slide 47: What You Will See and Hear
WHAT YOU WILL SEE AND HEAR: For personal use only What Will You See: - Strong alignment and leadership commitment to Zero Harm - Emphasis on linkages between Innovation, Market Leadership and World Class Manufacturing Australia: - How we will make a good business better JHS: - Recap on the strategic
Slide 48: Questions
For personal use only QUESTIONS
Slide 49: James Hardie Australia
For personal use only James Hardie Australia John Arneil, Country Manager Asia Pacific Investor and Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 50: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 51: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 52: Agenda
AGENDA For personal use only 1. AU Strategy 2. JH performance relative to the market 3. Market performance 4. How does JH outperform? PAGE 4
Slide 53: AU Strategy
AU Strategy For personal use only VISION: To transform the Australian way to build APPROACH: 1. Zero Harm: Accelerating our safety journey 2. Market Led: We are customer and consumer insights led with a unique go to market model 3. Innovative Solutions: Delivery of market valued systems and solution
Slide 54: Zero Harm at the core of our strategy
Zero Harm at the core of our strategy For personal use only Safe People Safe Places Safe Systems • Everyone at JH is a Safety • 5S and housekeeping visibly • Safety integrated into every Leader demonstrates Zero Harm function across the business • Every employee in the • Engineering controls are bus
Slide 55: Zero Harm is our number one priority – 5S example
Zero Harm is our number one priority – 5S example For personal use only 5S providing the platform for SAFE Plant, and standardised operations PAGE 7
Slide 56: James Hardie continues to beat the cycle
James Hardie continues to beat the cycle… For personal use only Indexed Movement: JH Volumes v Market (FY14 Base Yr). Percentage shown is CAGR 1.35 1.30 1.25 Indexed Movement 1.20 1.15 1.10 1.05 1.00 0.95 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 JH Volumes Detached & MD Starts A&A Bricks Source: ABS,
Slide 57: And deliver on financial objectives
And deliver on financial objectives For personal use only Strong Australian Revenue growth Driving International Segment results Revenue FY16 FY17 FY18 Net Sales (US$m) 379 412 462 Sales Volume (mmsf) 481 487 529 FY2015 FY2016 FY2017 FY2018 EBIT (US$m) 78 95 108 EBIT Margin % 21 23 24 Strong Austral
Slide 58: The housing cycle is starting to turn
The housing cycle is starting to turn For personal use only 1. Residential starts down but above long term average 3. Lending conditions have tightened Annual Starts 250,000 200,000 YoY 150,000 DT: -3% MD: -4% 100,000 HR: -18% 50,000 Total: -8% ‐ Detached Medium Density High Rise Total starts L/T av
Slide 59: Population growth, building approvals and pipeline remain strong
But population growth, building approvals and pipeline remain strong For personal use only 1. Strong population growth is driving fundamentals 3. Pipeline is excellent, particularly in Eastern States Annual Population Growth ‐ AUS Value of Pipeline ($M)‐ Detached & Medium Density 450,000 2.0% 25,000
Slide 60: Sales come from A&A, detached & medium density segments
James Hardie sales come from A&A, detached & medium density segments – less exposed to extreme variability For personal use only We have a strong weighting in A&A, detached and MD JH Segment Exposure A&A Detached Medium Density Other PAGE 12
Slide 61: How James Hardie outperforms the market
How James Hardie outperforms the market For personal use only Distribution via Differentiated Industry best Increased on unrivalled Growth Sustainable Insights products and demand the wall channel focused tools growth systems generation coverage network Independent Channels PAGE 13
Slide 62: Turning insights into action
Turning insights into action For personal use only DRIVING DEMAND VIA BUILDER SEGMENTATON & PARTNERING WITH CHANNEL “LOOK” JOURNEYS Industry leading understanding of Identified & marketing the two Expanding our primary demand how builders chose where to shop, unique FC looks which model to reach and
Slide 63: EPIC path to purchase
EPIC path to purchase For personal use only ENVY POSSIBILITY INVESTIGATE COMMITMENT INSPIRE PEOPLE TO WANT THE LOOK GIVE THE PERSON DOING THE JOB MAKE IT EASY Scyon (Hamptons & Mixed) & HardieDeck CONFIDENCE Category Growth/ Brick Switch Out Education & tools Education , incentives & tools via Consu
Slide 64: Holistic marketing
Holistic marketing For personal use only Leveraging all direct and co-marketing funds via builders and channel to drive holistic support Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverag
Slide 65: Aggressive New Product Development through Innovation Lab model
We continue to deliver aggressive New Product Development (NPD) growth through our leading Innovation Lab model For personal use only We are led by market We continue to drive a and customer insights culture of innovation to deliver via world-leading differentiated products innovation and services p
Slide 66: We drive growth throughout the product lifecycle curve
We drive growth throughout the product lifecycle curve For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 18
Slide 67: Differentiated products & systems: walls
We have differentiated products & systems: walls For personal use only Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 19
Slide 68: Differentiated products & systems: ceilings & linings
We have differentiated products & systems: ceilings & linings For personal use only Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 20
Slide 69: Differentiated products & systems: floors
We have differentiated products & systems: floors For personal use only Scyon™ Secura™ interior flooring Scyon™ Secura™ exterior flooring Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation covera
Slide 70: Differentiated products & systems: decking
We have differentiated products & systems: decking For personal use only Distribution Differentiated Industry best Increased on via unrivalled Growth Insights products and demand the wall channel focused tools systems generation coverage network PAGE 22
Slide 71: Differentiated products & systems: Hardie Smart
We have differentiated products & systems: Hardie Smart For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 23
Slide 72: Smart, driven and real people driving demand
We have smart, driven and real people driving demand For personal use only Sales Force Enablement: A strategic, collaborative discipline designed to increase sales results by leveraging intellectual property to provide consistent, scalable enablement services that allow customer-facing professionals
Slide 73: Wide channel distribution serving all end user segments
We have wide channel distribution enabling us to serve all end user segments For personal use only Unequalled distribution across all channels Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation cov
Slide 74: Opportunity to continue growing FC in the detached segment
There is opportunity to continue growing FC in the detached segment For personal use only Materials Share ‐ Detached Homes FC has a strong value proposition relative to brick, in particular Brick Veneer (Timber Frame Construction) brick veneer. Double Brick The data shows there is still a Light Weig
Slide 75: FC has a compelling value proposition relative to bricks
FC has a compelling value proposition relative to bricks For personal use only 1. 64% of consumers are demanding an FC look, as per our survey results Consumer survey: cladding preference (JH insights, n = 6574 June 2018) 10% Bricks 44% Hamptons/Coastal 26% 20% Hamptons/Coastal Modern mixed material
Slide 76: FC has a compelling value proposition relative to bricks
FC has a compelling value proposition relative to bricks For personal use only 2. Fibre cement provides the consumer with greater space - at a time where lot sizes are decreasing Source: HIA Source: JHA Analysis Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights pr
Slide 77: Fibre cement is quicker and cheaper to build with
FC has a compelling value proposition relative to bricks For personal use only 3. Fibre cement is QUICKER and CHEAPER to build with Speed of construction: JH vs Brick Cost of construction: JH vs Brick 60 140 50 120 100 40 m2/per day $per/m2 80 30 60 20 40 10 20 0 0 Face Scyon Stria™ Scyon Axon™ Face
Slide 78: Large pool of labour to construct with fibre cement
FC has a compelling value proposition relative to bricks For personal use only 4. There is a large pool of labour to construct with fibre cement relative to brick related trades Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel f
Slide 79: The Australian landscape used to look like this
The Australian landscape used to look like this… For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 31
Slide 80: But we are shaping it to look like this
But we are shaping it to look like this… For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 32
Slide 81: But we are shaping it to look like this
But we are shaping it to look like this… For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 33
Slide 82: But we are shaping it to look like this
But we are shaping it to look like this… For personal use only Distribution Differentiated Industry Best Increased on via unrivalled Growth Insights products & Demand the wall channel focused tools systems Generation coverage network PAGE 34
Slide 83: Manufacturing strategy aligns with organisational objectives
Our manufacturing strategy aligns with our organisational objectives For personal use only Deliver on Promise ‐ Quality ‐ DIFOT Organisational Capability ‐ Safety first ‐People ‐Hardie Advantage Asset Lowest cost Utilisation ‐Maximise yield ‐ Maximise ‐ Eliminate waste availability & ‐ Minimise inpu
Slide 84: Manufacturing costs coming down
Manufacturing costs coming down For personal use only Manufacturing costs are being driven down Cost of Goods Manufactured (per STDM) by: • Carole Park facility continuing to come up the curve in conjunction with consistent Rosehill performance • Hardie Advantage operating system implementation lead
Slide 85: Carole Park phase 2: increasing capacity
Carole Park phase 2: increasing capacity for the longer term For personal use only Four Strategic Concepts: • Capacity to service local market growth and penetration • Support and expand product leadership strategy and capability • Minimizes business risk • Drive low cost manufacturing PAGE 37
Slide 86: Summary
Summary For personal use only James Hardie is committed to “transforming the Australian way to build” using the below approach: Zero Harm: Accelerating our safety journey Market Led: We are customer and consumer insights led with a unique go to market model Innovative Solutions: Delivery of market v
Slide 87: Questions
For personal use only QUESTIONS
Slide 88: James Hardie Systems
For personal use only James Hardie Systems Steven Terzian, General Manager JHS Asia Pacific Investor and Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 89: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 90: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 91: Agenda
AGENDA For personal use only 1. JHS Strategy 2. Alignment to segmentation 3. Current market performance 4. HD construction methodology and PFW 5. Why Ritek? 6. JHS Performance PAGE 4
Slide 92: Recap on the Acquisition
Recap on the Acquisition For personal use only Ritek Wall Systems was acquired in February 2017, forming a new business unit within the JH group Alignment to the JH business model Expansion into a growing residential High Density (HD) segment Technically superior walling system Opportunity
Slide 93: JHS Strategy
JHS Strategy For personal use only Vision: Transform the Australian way to build APPROACH 1. Zero Harm: Build on momentum. 2. Market Led: Continue to build insight into the segment and its stakeholder requirements 3. Innovative Solutions: Expand on system offer and incorporation of FC cladding optio
Slide 94: Zero Harm at the Core of Our Strategy
ZERO HARM AT THE CORE OF OUR STRATEGY For personal use only Safe People Safe Places Safe Systems • Everyone at JH is a Safety • 5S and housekeepingvisibly • Safety integrated intoevery Leader demonstrates Zero Harm function across the business • Every employee in the • Engineering controls are busin
Slide 95: Aligning with the organisations Zero Harm culture
Aligning with the organisations Zero Harm culture Example of improvements within mobile plant interaction For personal use only PAGE 8
Slide 96: Residential Construction Market
Residential Construction Market For personal use only Renovation Single Medium Medium High Ultra High Detached Density Density Density Density (Townhouses) (Up to 3 levels) (4‐12 Levels) ( >12 Storey) Densification PAGE 9
Slide 97: Densification and Growth Corridors aligned with Transport Hubs
Densification and Growth Corridors aligned with Transport Hubs Social and economic factors driving densification into our suburban hubs For personal use only PAGE 10
Slide 98: High rise starts predicted to fall but above historical average
Although high rise starts are predicted to fall – they are still above the historical average For personal use only High Rise Starts 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 ‐ Dec 98 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec
Slide 99: Pipeline of work remaining is large
For personal use only Value of Pipeline ($m) 0 5000 10000 15000 20000 25000 30000 35000 Sep‐01 Mar‐02 Sep‐02 Mar‐03 Sep‐03 Mar‐04 Sep‐04 Mar‐05 Sep‐05 Mar‐06 Sep‐06 Mar‐07 NSW Sep‐07 Mar‐08 VIC Sep‐08 Mar‐09 Sep‐09 Mar‐10 QLD Sep‐10 High Rise Pipeline Mar‐11 Sep‐11 Other Mar‐12 Sep‐12 Mar‐13 Sep‐13
Slide 100: JH achieves access across all segments
JH achieves access across all segments For personal use only Renovation Single Medium Medium High Ultra High Detached Density Density Density Density (Townhouses) (Up to 3 levels) (4‐12 Levels) ( >12 Storey) PAGE 13
Slide 101: Methods of Construction within the HD Segment
Methods of Construction within the HD Segment Traditional For personal use only Core Filled Block Pre Cast Permanent Form Work Temporary Formwork Double Brick PAGE 14
Slide 102: Permanent Formwork (PFW)
Permanent Formwork (PFW) For personal use only What is PFW? PFW is a structural walling system that consists of braces or moulds, put in place to contain concrete as it sets, however not removed after the fact. PAGE 15
Slide 103: Product Maturity within the HD Segment
Product Maturity within the HD Segment For personal use only Adoption / Penetration rate HD Market Share % of area using Temporary Pre-cast Formwork 100 MATURITY DECLINE 90 Core Filled PFW, 33% 50 GROWTH Block Traditional, 67% Permanent Form Work 10 0 INTRODUCTION Life Cycle progression Source: JHA
Slide 104: PFW Construction Benefits
PFW Construction Benefits For personal use only Offering strong benefits against traditional methods Speed of construction Smaller crane Reduces cost Improved logistics Customization promotes better managing of materials and waste Resolves site access challenges Building within tight
Slide 105: Why Ritek?
Why Ritek? For personal use only Concrete Durability Fill Finished Minimum Wall Blowouts Capability In our view Ritek delivers the most advanced PFW solution PAGE 18
Slide 106: JHS System Offering – XL and XLT
JHS System Offering – XL and XLT For personal use only Patented solution System Details and Benefits Accessories delivering on water management and aesthetic benefits Internal core structure providing durability and concrete management In-situ thermal capabilities R1.5 – 4.8 Reduce wall th
Slide 107: JHS – Business Model
JHS – Business Model For personal use only PAGE 20
Slide 108: JHS System Applications
JHS System Applications For personal use only Exterior Interior Blade Walls Lift Shafts Stair Wells Columns PAGE 21
Slide 109: Creating Value via the Finished Wall Capability
Creating Value via the Finished Wall Capability JHS patented stud configuration with JH’s superior fibre cement provides value in For personal use only the reduction of building cost and creates additional space System Installed Wall Cost Delivered Price Installation Cost Battens & Lining Joint Se
Slide 110: JHS PFW compelling value proposition vs traditional methods
JHS PFW has a compelling value proposition relative to traditional methods For personal use only While apartment sizes are decreasing, JHS provides the opportunity for more space PAGE 23
Slide 111: Increasing the Value of Fibre Cement into each HD build
Increasing the Value of Fibre Cement into each HD build For personal use only Expanding the Bundle – Structure & Cladding Increasing the Penetration of FC into HD Aligning and influencing Architectural project Design stakeholders PAGE 24
Slide 112: Increasing fibre cement penetration into the HD segment
Increasing fibre cement penetration into the HD segment For personal use only Enabling a fibre cement bundle within the HD segment while providing the opportunity to differentiate the look PAGE 25
Slide 113: Leveraging operational excellence within the JH business
Leveraging off operational excellence within the JH business For personal use only Phase 1: Focusing on key areas to reduce cost and increase profitability Phase 2: Introduce Hardie Advantage to continue to drive improvement PAGE 26
Slide 114: JHS Business Performance
JHS Business Performance For personal use only Since the acquisition the following has been achieved: “One Organisation” has been formed Key staff retained Immediate focus on safety with positive shift in culture Strategy is playing out with growth achieved Successful entry into the HD s
Slide 115: JHS Strategy
JHS Strategy For personal use only Vision: Transform the Australian way to build APPROACH 1. Zero Harm: Build on momentum. 2. Market Led: Continue to build insight of the segment and its stakeholder requirements 3. Innovative Solutions: Expand on system offer and incorporation of FC cladding options
Slide 116: Questions
For personal use only QUESTIONS
Slide 117: James Hardie New Zealand
For personal use only James Hardie New Zealand Alan Bones, Country Manager Asia Pacific Investor and Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 118: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 119: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 120: NZ Overview
NZ OVERVIEW For personal use only • Zero Harm: Is at the core of our strategy with investment in people, places and systems. • People: Continual focus on Smart, Driven and Real people to deliver a sustainable competitive advantage. • Market Performance: The New Zealand construction market is expecte
Slide 121: Agenda – James Hardie New Zealand
Agenda – James Hardie New Zealand For personal use only NZ strategy Smart Driven and Real People Performance relative to NZ market Customer segments – “Market Led” Products leadership – “Innovation” Manufacturing excellence PAGE 5
Slide 122: NZ Strategy
NZ Strategy For personal use only VISION: To transform the way Kiwi’s build APPROACH 1. Zero Harm: Accelerating our safety journey. 2. Market Led: Through insights and primary stakeholder engagement we defend and expand our category leading position. 3. Innovative Solutions: Delivery of differentiat
Slide 123: Zero Harm at the Core of Our Strategy
ZERO HARM AT THE CORE OF OUR STRATEGY For personal use only Safe People Safe Places Safe Systems • Everyone at JH is a Safety • 5S and housekeepingvisibly • Safety integrated intoevery Leader demonstrates Zero Harm function across the business • Every employee in the • Engineering controls are busin
Slide 124: We have Smart, Driven, and Real People
We have Smart, Driven, and Real People For personal use only Attract, Build, and Retain top talent that embodies the James Hardie culture for sustainable competitive advantage • New NZ Leadership team in place, focusing on improving the business in each function, and as a whole • Leverage regional f
Slide 125: End user focus drives sales through a wide network of distributors
End user focus drives sales through a wide network of distributors For personal use only New Zealand Fibre Cement Market Commercial A&A Builder Suppliers and Major Channel End User Segments Players Mid- Small- Others Large/Group Medium Home Builder Builders DIY PAGE 9
Slide 126: Differentiated solutions across all major building segments
We provide differentiated solutions across all major building segments For personal use only A&A Detached Semi-Detached Medium Density - High Density - Mix Commercial Townhouses Apartments PAGE 10
Slide 127: NZ market performance has been strong
Market Performance: NZ market performance has been strong For personal use only 1. Building consents (lead indicator of future 2. A&A is expected to come down as activity) are up by 5.4% in 2018 vs. 2017 quake rebuild finishes – but activity is still well above long term average Building Consents (A
Slide 128: NZ market indicators are solid
Market Performance: NZ market indicators are solid For personal use only 3. Annual net migration is at its peak – 4. Government policy driving more social driving population growth and future housing: Kiwi-Build programme will build demand for housing 100,000 affordable homes over 10 years Net Migra
Slide 129: JHNZ maintaining strong growth in a flattening market
JHNZ maintaining strong growth in a flattening market For personal use only Source: JH Sales / Stats NZ residential consent numbers Quarter lag applied between sales and building consent issued PAGE 13
Slide 130: Targeted demand generation is pivotal to our success
Targeted demand generation is pivotal to our success… For personal use only Defend & Grow Defend Grow Category Share Share of Addressable Position Value to Channel Detached Homes / A&A Innovate Differentiated solutions Emerging Markets Medium Density / New Audiences Fire, Acoustics and Pre Cladding
Slide 131: Our strength and opportunity lies in residential
… however our strength and opportunity lies in residential For personal use only PAGE 15
Slide 132: Value drivers in residential cladding are strong
And our value drivers in residential cladding are strong For personal use only 79% of NZ consumers looking for modern or contemporary designs and performance is a key value driver in the cladding space Versatility Design Modern ‐ 60% Contemporary ‐ 19% Traditional ‐ 21% Performance Superior James Ha
Slide 133: Cladding: Leveraging vertical look trends in residential
Cladding: Leveraging vertical look trends in residential For personal use only PAGE 17
Slide 134: Transforming the built form in Residential Cladding
…and transforming the built form in Residential Cladding For personal use only LINEA™ WEATHERBOARD LINEA™ OBLIQUE WEATHERBOARD PAGE 18
Slide 135: Transforming the built form in Residential Cladding
…and transforming the built form in Residential Cladding For personal use only STRIA™ CLADDING AXON™ / TITAN™ PANEL PAGE 19
Slide 136: Density typologies are changing the addressable landscape
Density typologies are changing the addressable landscape… For personal use only Change in Construction Impacts Addressable Consents External Wall Area 35,000 3,400 3,300 30,000 3,239 21% 96 3,200 7% New Residential Cladding area 1,951 25,000 2,009 154 695 4,875 3,100 2,604 (SQM,000's) 20,000 89 3,0
Slide 137: Opportunity for our differentiated systems: Fire and Acoustic floor
...creates an opportunity for our differentiated systems For personal use only James Hardie Fire and Acoustic rated floor Lightweight intertenancy solution F&A floor achieves above code: STC: Sound Transmission Class IIC: Impact Insulation Class PAGE 21
Slide 138: Opportunity for our differentiated systems: Fire rated walls
...creates an opportunity for our differentiated systems For personal use only James Hardie Fire rated Walls Lightweight Exterior wall solutions FRR: Fire Resistance Rating PAGE 22
Slide 139: Growth above market bolstered by investment in the Customer
Growth above market is bolstered by investment in the Customer For personal use only • Customer Insights - leverage insights capability in, as well as through the organization • Customer Excellence - go beyond product leadership to create value for all stakeholders • Sales Effectiveness - new system
Slide 140: Insight led Innovation to strengthen and secure our position
Insight led Innovation to strengthen and secure our position For personal use only SQM volume 8% 11% 5% 2014 HomeRAB® Pre- 2015 Linea® Oblique Cladding Weatherboard 2016 2017 2018 2018 Secura™ F&A 2019 RAB™ New Product contribution under 5 years Flooring System Board 9mm PAGE 24
Slide 141: Pre-Cladding: Accelerate growth in all segments
Pre-Cladding: Accelerate growth in all segments For personal use only • Rigid alternative to building paper • HomeRAB™ Pre-Cladding launched in FY14 • HomeRAB™ Thermal Break launched in FY16 Residential detached • Coming soon: New RAB™ Board 9mm Volume Growth 2016 Launch HomeRAB® Thermal Break (Stee
Slide 142: Transforming the way we build with Residential Pre-Cladding
Transforming the way we build with Residential Pre-Cladding For personal use only HOMERAB™ Pre-Cladding PAGE 26
Slide 143: Transforming the way we build with Commercial Pre-Cladding
…and transforming the way we build with Commercial Pre-Cladding For personal use only RAB™ Board PAGE 27
Slide 144: Penrose: Manufacturing Excellence to meet growing demand
PENROSE: Manufacturing Excellence to meet growing demand For personal use only Investment in people, process and systems to create capacity and deliver on organisational objectives in response to significant growth above market both locally and regionally • 80 years manufacturing in New Zealand, for
Slide 145: NZ Strategy
NZ Strategy For personal use only VISION: To transform the way Kiwi’s build APPROACH 1. Zero Harm: Accelerating our safety journey. 2. Market Led: Through insights and primary stakeholder engagement we defend and expand our category leading position. 3. Innovative Solutions: Delivery of differentiat
Slide 146: Questions
For personal use only QUESTIONS
Slide 147: James Hardie Philippines
For personal use only James Hardie Philippines Jon Cook, Finance Director - APAC Asia Pacific Investor & Analyst Tour Sunshine Coast, Australia June 25-26, 2018
Slide 148: Cautionary Note on Forward-Looking Statements
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS For personal use only This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities an
Slide 149: Cautionary Note on Forward-Looking Statements (continued)
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) For personal use only Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and sim
Slide 150: Agenda
Agenda For personal use only 1. JH Strategy, country and economic overview 2. Market performance 3. Where do we play? 4. JH performance 5. What strategies & actions drive our success? PAGE 4
Slide 151: Zero Harm at the Core of our Strategy
Zero Harm at the Core of our Strategy For personal use only Safe People Safe Places Safe Systems • Authority to stop work • 5S and housekeepingvisibly • Integration of safety in program demonstrates Zero Harm every part of the business • Leadership safety • Engineering controls are • Hazard and Risk
Slide 152: Philippines Strategy
Philippines Strategy For personal use only VISION: Transforming the way the Philippines builds APPROACH 1. Zero Harm: Leadership accountability and risk education. 2. Market Led: Distinguish the Hardieflex brand from generic. Focus on channel and projects. 3. Innovative Solutions: Product upgrade of
Slide 153: Country Overview: large and urbanizing population
Country Overview: PH has a large and urbanizing population For personal use only 1. PH is the 12th highest populated 2. Urban population expected to country in the world double by 2050 to 102m (World Bank) • Population:107million An urbanized population presents greater • 2nd in ASEAN bloc, behind I
Slide 154: Economic Overview: enviable economic growth and unemployment
Economic Overview: PH has enviable economic growth and unemployment For personal use only 3. PH’s economic growth rate is 4. PH’s unemployment is trending outpacing that of other ASEAN countries down and is now 5.7% Annual Real GDP Growth Rate Unemployment (% of active population) 9.0 8.0 8.0 7.5 7.
Slide 155: Market Performance: residential and non residential segments growing
Market Performance: both residential and non residential segments are growing For personal use only 1. Residential permits are up 7% for FY18 2. Non residential permits are also up 7% for FY18 Residential Building Permits Non Res Building Permits 18,000,000 10,000,000 16,000,000 9,000,000 14,000,000
Slide 156: Market Performance: A&A down but population growth continues
Market Performance: A&A down but population growth will continue to drive fundamentals For personal use only 3. A&A is down by 7% for CY18 4. PH has the highest population growth rate amongst ASEAN economies Value of A&A Building Permits Population Growth Rate (2017) ‐ ASEAN 30,000,000 Countries 2.5
Slide 157: JH exposure across all segments
JH exposure: exposure across all segments For personal use only What are the various segments of the JH has a strong exposure in A&A, but market? maintains good positions across other segments JH Segment Exposure A&A Horizontal Non Res & Vertical PAGE 11
Slide 158: JH is winning back category share from imports
JH Performance: JH is winning back category share from imports For personal use only % Quarterly Growth Rates YOY JH volume growth is now consistently exceeding imports volume growth. JH Total Imports Source: PH Customs, JH Analysis PAGE 12
Slide 159: Growth trajectory restored in FY18
JH Performance: Growth trajectory restored in FY18 For personal use only Volume: 4 year positive CAGR EBIT: 4 year positive CAGR VOLUME EBIT FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Revenue: 4 year positive CAGR REVENUE FY15 FY16 FY17 FY18 PAGE 13
Slide 160: Strategies & actions that drive our success
What are the strategies & actions that drive our success? For personal use only 1. Insights 2. Quality Products 3. Demand Generation 4. Channel Distribution Network 5. World Class Manufacturing 6. Driven People PAGE 14
Slide 161: Through a variety of surveys we develop insights
Through a variety of surveys we develop insights For personal use only Homeowners Carpenters 400 300 Independent market surveys performed during calendar year 2017. Contractors Developers Insights Numbers represent survey respondents. 500 300 PAGE 15
Slide 162: Using our insights and strong brand value
Using our insights and strong brand value For personal use only HardieFlex value proposition: • The word “HardieFlex” is synonymous with fiber cement products. • Recognised value and quality. • Assurance and service from a trusted and proven brand. Quality Products PAGE 16
Slide 163: Differentiated products across multiple applications
We develop differentiated products across multiple applications For personal use only cladding ceilings Quality eaves Internal wall Products PAGE 17
Slide 164: We foster a best in class sales team
We foster a best in class sales team. We do this by: For personal use only 1. Offering ‘quantum’ up skilling FY19 FY20 FY21 Q1 Q2 Q1 Q3 Q1 Q3 SALES TEAM SALES PROCESS & DIAGNOSE & ACCOUNT TERRITORY DEMONSTRATING ADVANCED STIMULATING GETTING TO YES PLANNING PLANNING & VALUE NEGOTIATION INTEREST NEGOT
Slide 165: Wide channel distribution serving all end user segments
We have wide channel distribution enabling us to serve all end user segments For personal use only Superior Distribution Network PAGE 19
Slide 166: Largest channel coverage with ambitions to grow further
We have the largest channel coverage positions but we still have ambitions to grow our distributor coverage further For personal use only Currently 4,500 stores are covered, but we plan to jump to more than 7,000 by FY21 Total Store Coverage 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 ‐ FY 17 FY
Slide 167: Line investment: increasing capacity
Line 2 investment: increasing capacity to serve the growing construction market in the Philippines For personal use only 1ST Class Manu‐ facturing PAGE 21
Slide 168: Smart, driven & real people
We have smart, driven & real people. We invest to develop and retain them For personal use only GOAL: develop a highly engaged diverse team Team Development Manufacturing that creates sustainable value for the business now and into the future • "Day‐to‐Day Management Training Program” for Managers a
Slide 169: Philippines Strategy
Philippines Strategy For personal use only VISION: Transforming the way the Philippines builds APPROACH 1. Zero Harm: Leadership accountability and risk education. 2. Market Led: Distinguish the Hardieflex brand from generic. Focus on channel and projects. 3. Innovative Solutions: Product upgrade of
Slide 170: Questions
For personal use only QUESTIONS
James Hardie Industries — Investor Presentation (June 2018) on 6ix