James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q2 FY21 Earnings Presentation
32 slides from James Hardie Industries's earnings presentation, Nov 10, 2020
Slide 1: Q2 FY21 Management Presentation
Exhibit 99.5 Q2 FY21 MANAGEMENT PRESENTATION 10 November 2020
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q2 FY21 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 Q2 FY21 Results AGENDA • Strategy Update Dr. Jack Truong Chief Executive Officer • Q2 FY21 Financial Results • Questions and Answers Jason Miele Chief Financial Officer Page 3
Slide 4: Strategy Update
STRATEGY UPDATE
Slide 5: Global Strategy: On Track and Accelerating
James Hardie Q2 FY21 Results GLOBAL STRATEGY: ON TRACK AND ACCELERATING Year 1: FY20 Year 2: FY21 Year 3: FY22 Begin the Shift from Big, Build on our Momentum Develop New Global SMALL, to Small, BIG Company As a Global Company Growth Platforms . Develop World Class Manufacturing . Continue to execut
Slide 6: Global Growth and Strong Returns
James Hardie Q2 FY21 Results GLOBAL GROWTH AND STRONG RETURNS Global Quarterly Net Sales US$ and Adjusted EBIT Margin %- Record Quarter $800 PUSH-PULL Strategy Began 24% Q2 FY20 $700 Integration of Fermacell Q1 FY19 22% $600 20% $500 18% $400 16% $300 LEAN Mfg Started in NA 14% Q4 FY19 $200 12% Glob
Slide 7: Update on LEAN Progress – Q1 FY20 to Q2 FY21
James Hardie Q2 FY21 Results UPDATE ON LEAN PROGRESS – Q1 FY20 TO Q2 FY21 Actual NA LEAN COGS Savings vs FY19 Baseline Actual Global LEAN COGS Savings vs FY19 Baseline 60 60 62.0 50 50 40 45.7 40 30 30 US$ Millions 20 US$ Millions 20 10 10 13.7 9.2 9.4 9.2 10.1 11.0 13.2 7.4 8.3 8.4 4.8 0 3.0 0 Q1 F
Slide 8: Engage and Integrate with Our Customers
James Hardie Q2 FY21 Results ENGAGE AND INTEGRATE WITH OUR CUSTOMERS NA Net Sales and Inventory 550 300 • NA Net Sales increased US$85 million (+20%) 530 515 280 while inventory decreased US$76 million (-35%) 510 260 over the past 9 months 490 218 475 240 470 452 220 - Improved integration with our
Slide 9: Operating Cash Flow
James Hardie Q2 FY21 Results OPERATING CASH FLOW Operating Cash Flow • Operating Cash Flow was US$416.8 million, an increase of US$165 million (+66%) over First Half 450 416.8 FY20 400 - Continued momentum of profitable sales growth 350 while managing working capital seamlessly for our customers and
Slide 10: Q2 FY21 Financial Results
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Slide 11: Group Results Overview
James Hardie Q2 FY21 Results GROUP RESULTS OVERVIEW • Group Net Sales increased 12% in Q2 and 4% in the first half Q2'21 1H'21 • Adjusted EBIT increased 22% in Q2, driven by: 1,041.8 mmsf 1,953.7mmsf Sales Volume ◦ North America increased US$23.9 million (+19%) 8% 2% ◦ Europe increased €4.2 million
Slide 12: North America Summary
James Hardie Q2 FY21 Results NORTH AMERICA SUMMARY Q2'21 1H'21 • Exteriors volume increased 11% in Q2 and +6% in the first half ◦ Continued to gain share through customer engagement 686.7 mmsf 1,296.4 mmsf Sales Volume and integration 11% 5% • Interiors volume increased 7% in Q2 and decreased -2% in
Slide 13: Europe Summary
James Hardie Q2 FY21 Results EUROPE SUMMARY Q2'21 1H'21 • Net Sales increased 8% in Q2: 209.9 mmsf 402.1 mmsf ◦ Fiber Cement Net Sales €: +14% in Q2 Sales Volume 7% -1% ◦ Fiber Gypsum Net Sales €: +7% in Q2 €85.3 M €160.7 M Net Sales • Net Sales decreased 2% in the first half due to impact of COVID-
Slide 14: APAC Summary
James Hardie Q2 FY21 Results APAC SUMMARY Q2'21 1H'21 • Continued growth above market in Australia, volume 145.2 mmsf 255.2 mmsf Sales Volume +4% in Q2 and +2% in the first half 2% -8% • First half volume, gross profit and EBIT unfavorably A$170.6M A$309.3 M Net Sales impacted by government imposed
Slide 15: General Corporate Costs and Research & Development
James Hardie Q2 FY21 Results GENERAL CORPORATE COSTS RESEARCH & DEVELOPMENT 1 Excludes asbestos related expenses and adjustments 1 Excludes restructuring expenses • Stock compensation expense increased • Customer Driven Innovation remains US$4.5 million in Q2 and US$11.6 core strategic pillar millio
Slide 16: Group Results – Q2
James Hardie Q2 FY21 Results GROUP RESULTS – Q2 US$ % • Adjusted EBIT increased 22% US$ Millions Q2'21 Q2'20 Change Change EBIT • Strong segment performance: North America Fiber Cement1 $ 148.6 $ 124.7 23.9 19% • North America Adjusted EBIT up US$23.9 million Asia Pacific Fiber Cement1 38.7 27.0 11.
Slide 17: Group Results – First Half
James Hardie Q2 FY21 Results GROUP RESULTS – FIRST HALF US$ % • Adjusted EBIT increased 11% US$ Millions 1H'21 1H'20 Change Change EBIT • Strong segment performance: 1 North America Fiber Cement 279.5 238.2 41.3 17% • North America Adjusted EBIT up US$41.3 million 1 Asia Pacific Fiber Cement 61.0 51
Slide 18: Cash Flows and Capital Expenditures
James Hardie Q2 FY21 Results CASH FLOWS CAPITAL EXPENDITURES US$ Millions 1H’21 1H’20 Change % a a a a Cash provided by operations 416.8 251.8 66 % 1 Cash used in investing (25.4) (177.8) (86 %) Cash used in financing (130.4) (54.1) Higher operating cash flows, up 66% • Integrated with our customers
Slide 19: Liquidity Profile on 30 September 2020
James Hardie Q2 FY21 Results LIQUIDITY PROFILE ON 30 SEPTEMBER 2020 Strong balance sheet • US$885.9 million of liquidity on 30 September 2020 ◦ US$390.6 million cash and US$495.3 million available on RCF • US$864.2 million net debt3 Corporate debt structure 2 • US$400 million 4.75% senior unsecured
Slide 20: Capital Management
James Hardie Q2 FY21 Results CAPITAL MANAGEMENT We periodically review our capital structure and capital allocation objectives and expect the following capital management focus in the short term: • Maintain flexibility through market volatility; • Invest in capacity expansion to support organic grow
Slide 21: Full Year FY21 Guidance
James Hardie Q2 FY21 Results FULL YEAR FY21 GUIDANCE Management reaffirms full year FY21 Adjusted net operating profit1 guidance range of US$380 million and US$420 million The comparable full year Adjusted net operating profit for FY20 was US$352.8 million James Hardie continues to assess the impact
Slide 22: Questions
QUESTIONS
Slide 23: Appendix
APPENDIX
Slide 24: Depreciation and Amortization
James Hardie Q2 FY21 Results DEPRECIATION AND AMORTIZATION US$ Millions Three Months and Half Year Ended 30 September Q2'21 Q2'20 1H'21 1H'20 Depreciation and amortization North America Fiber Cement $ 21.7 $ 22.0 $ 42.9 $ 44.0 Asia Pacific Fiber Cement 3.0 3.2 5.8 6.2 Europe Building Products 6.2 5.
Slide 25: Asbestos Claims Data
James Hardie Q2 FY21 Results ASBESTOS CLAIMS DATA Claims Received First Half ended 30 September 2020: 353 312 289 • Net cash outflow was 13% below actuarial expectations 196 156 134 • Gross cash outflow was 13% below actuarial expectations • Claims received were 7% below actuarial estimates and Q2'2
Slide 26: Non-US GAAP Financial Measures and Terms
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES AND TERMS 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
Slide 27: Non-US GAAP Financial Measures
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES Financial Measures – US GAAP equivalents This document contains financial statement line item descriptions that are considered to be non-US GAAP, but are consistent with those used by Australian companies. Because the company prepares its C
Slide 28: Non-US GAAP Financial Measures – Adjusted EBIT
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES Financial Measures – US GAAP equivalents Adjusted EBIT US$ Millions Three Months and Half Year Ended 30 September Q2'21 Q2'20 1H'21 1H'20 EBIT $ 146.5 $ 152.6 $ 196.3 $ 285.1 Asbestos: Asbestos adjustments 16.3 (18.8) 80.0 (27.3) AICF SG&A
Slide 29: Non-US GAAP Financial Measures – Segment Adjusted EBIT
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES Asia Pacific Fiber Cement Segment Adjusted EBIT excluding restructuring expenses US$ Millions Three Months and Half Year Ended 30 September Q2'21 Q2'20 1H'21 1H'20 Asia Pacific Fiber Cement Segment EBIT $ 38.7 $ 27.0 $ 57.6 $ 51.8 Restructu
Slide 30: Non-US GAAP Financial Measures – R&D and Adjusted Interest
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES Research and Development Segment Adjusted EBIT excluding restructuring expenses US$ Millions Three Months and Half Year Ended 30 September Q2'21 Q2'20 1H'21 1H'20 Research and Development Segment EBIT $ (6.4) $ (6.9) $ (12.5) $ (13.1) Restr
Slide 31: Non-US GAAP Financial Measures – Adjusted Net Operating Profit
James Hardie Q2 FY21 Results NON-US GAAP FINANCIAL MEASURES Adjusted net operating profit US$ Millions Three Months and Half Year Ended 30 September Q2'21 Q2'20 1H'21 1H'20 Net operating profit $ 86.8 $ 103.1 $ 96.2 $ 189.6 Asbestos: Asbestos adjustments 16.3 (18.8) 80.0 (27.3) AICF SG&A expenses 0.
Slide 32: Q2 FY21 Management Presentation
Q2 FY21 MANAGEMENT PRESENTATION 10 November 2020
James Hardie Industries — Q2 FY21 Earnings Presentation on 6ix