James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Day (September 2010)
43 slides from James Hardie Industries's investor day presentation, Sep 16, 2010
Slide 1: R&R Segment
R&R Segment Mark Fisher / Paul Gentzel
Slide 2: Disclaimer
Disclaimer This Management's 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 United States Securities and Exchange Commission on Forms 20-F and 6-K, in the annual reports to sh
Slide 3: Outline
3 Outline Market / Strategy Review James Hardie R&R Progress Update Review R&R Next Stage Thinking Summary/Go Forward
Slide 4: The Market: Repair and Remodel Market Overview
4 The Market Repair and Remodel Market Overview
Slide 5: R&R opportunity continues to grow vs. New Construction
5 R&R opportunity continues to grow vs. New Construction Total Value in USD 2006 2010 Source: NAHB
Slide 6: R&R Segment Strategy
R&R Segment Strategy Business Strategy- Switch the preference from vinyl to fiber cement by directly communicating the benefits and affordability of James Hardie to the Consumer 2/3 of Americans can afford James Hardie when presented with an affordable option Most Americans will choose fiber cement
Slide 7: R&R Strategic Objectives
R&R Strategic Objectives Objectives Get into home via education, contractor or both PDG ( Terminal share >35%) Category Share-90% Shift to Full Wrap- C+, Trim 7 Outcomes/Challenges JH can impact seller and buyer behavior C+ and Trim attachment rates lead business Category Share is approx. 90%+ Marke
Slide 8: R&R Segment Strategy, Objectives, Initiatives
8 R&R Segment Strategy, Objectives, Initiatives JH influences the decision in the home on both the Buyer (homeowner) side and the Seller (contractor) side Homeowner Contractor
Slide 9: Contractor Landscape
9 Contractor Landscape 34% 26% 8% 9% 12% 10% 2% $ 10 mm + $750K - - $999K $500K - - $749K $250K - - $499K > $250K Breakdown by Sales Revenue Top 24% of contractors: Mean Contractor Rev: $1.04 mm Median Contractor Rev: $450K Bottom 76% of contractors: $ 2.0 - - $9.9 mm $ 1.0 - - $1.9 mm James Hardie
Slide 10: Market Penetration Approach and Strategy
10 Market Penetration Approach and Strategy Houston Portland Atlanta Seattle Raleigh San Antonio Charlotte St. Louis Minneapolis Detroit New Jersey Austin Chicago Denver DC Mix Shift in High Penetration Markets Large PDG Opportunity in Early 'S' Curve Markets
Slide 11: Vinyl Market Terminal Share
11 Vinyl Market Middle 3 rd Top 3 rd Terminal Share without JH direct intervention Bottom 3 rd Terminal Share with JH direct intervention Middle 3 rd Top 3 rd Bottom 3 rd Wood/Stone Wood/Stone Vinyl Vinyl
Slide 12: JH R&R Product Targets
12 JH R&R Product Targets Middle 3 rd Top 3 rd Bottom 3 rd Wood/Stone Vinyl Terminal Share with JH direct intervention Distinct Product Targets in the Expanded Middle Artisan James Hardie Value Color Plus Full Wrap
Slide 13: James Hardie Repair and Remodel Progress Update
13 James Hardie Repair and Remodel Progress Update
Slide 14: R&R Progress Update
14 R&R Progress Update JH Organization Contractor Programs, Training and Tools Consumer Awareness JH Siding Center
Slide 15: R&R Progress - JH Organization
15 R&R Progress - JH Organization Good progress on Organizational Alignment and Knowledge Field Sales focus continues to shift - 80+ reps with significant R&R responsibility - continue to add R&R "Playbook" and 6 week web based Playbook training key to shift focus All reps have % design responsibili
Slide 16: R&R Progress - JH Organization: Sales Machine
16 R&R Progress - JH Organization § R&R Sales and each individual Rep ' s efforts can be viewed as a machine with raw materials (Targets), a production line (movement of targets) and finished goods (Conversions). Further finishing is possible in the form of Account Dev. § The volume and quality of r
Slide 17: Contractor Programs: Website Contractor Value Proposition
17 R&R Progress - Contractor Programs, Training and Tools Website Contractor Value Proposition Credibility in the home with Consumers Exposure and Impressions via Web listing Business Building Blocks Members Only Website Consumer Leads
Slide 18: Contractor Programs: Leads and Impressions
18 R&R Progress - Contractor Programs, Training and Tools Leads and Impressions - provide qualified consumer leads for aligned contractors Attaining Contractor "Attachment Rates" for C+, Trim and Wrap Website Contractor program qualifications/guidelines will lead to an additional program
Slide 19: Contractor Training Focus Areas
19 R&R Progress - Contractor Programs, Training and Tools Contractor Training is focused in four key areas Marketing and Lead Generation In-Home Sales Production, Installation, Best Practices Post Production
Slide 20: R&R Progress - Contractor Programs, Training and Tools
20 R&R Progress - Contractor Programs, Training and Tools
Slide 21: R&R Progress - Contractor Programs, Training and Tools
21 R&R Progress - Contractor Programs, Training and Tools R&R Progress - Contractor Programs, Training and Tools
Slide 22: In-Home Sales Methodology
22 R&R Progress - Contractor Programs, Training and Tools 10 Step In-Home Sales Methodology Focus on Selling Value in the Home Overcoming Objections Vinyl market Prime-to-Color market Role Play with Mike Sipe (Sales Manager, JHSC) Over 20 years of in-home selling experience
Slide 23: Preferred Remodelers and GuildQuality Surveys
23 R&R Progress - Contractor Programs, Training and Tools 500 members across North America Members receive: Real-time feedback Web-based reporting Marketing tools JH Preferred Remodelers have all JH jobs surveyed GuildQuality Professional Customer Satisfaction Survey Tool - GuildQuality's mission is
Slide 24: Website Contractor Program Delivers Value
24 R&R Progress - Contractor Programs, Training and Tools R&R Progress - Contractor Programs, Training and Tools Website Contractor Program continues to deliver value to aligned contractors
Slide 25: Contractor Training and Communication
25 R&R Progress - Contractor Programs, Training and Tools Combination of one-on-one or group training, Aggregation Events and newsletters used to communicate with and train contractors. Exclusive News for the James Hardie Contractor
Slide 26: Consumer Awareness Efforts
26 R&R Progress - Contractor Programs, Training and Tools Consumer Awareness efforts continue to increase: Over 200 Home Shows in 2009/2010 season and the same number planned for the current 2010/2011 season Neighborhood Events - Leverage a successful James Hardie or Artisan re-side in a highly targ
Slide 27: Recent Neighborhood Events
27 R&R Progress - Contractor Programs, Training and Tools Cameron Woods Community Event June 19th, Charlotte, NC Thornton, CO Open House July 24th, 2010 Recent Neighborhood Events
Slide 28: R&R Progress - James Hardie Siding Center
28 R&R Progress - James Hardie Siding Center Lead generation, jobs and revenue all growing Continues to provide unmatched credibility with Professional Contractors across US Learning how to sell up and sell down - Artisan and Vinyl Fighter Leveraging our knowledge in production and sales across more
Slide 29: R&R Progress Issues and Challenges
29 R&R Progress Issues and Challenges Continue organizational resource build Improving organizational focus and effectiveness in R&R Emphasis on target acquisition and segmentation Grow Preferred Remodeler geographic presence Preferred Remodelers as an extension of JH in the home
Slide 30: R&R Progress Issues and Challenges
30 R&R Progress Issues and Challenges Launch and scale "Associate" Program Ensure "benefits and affordability" message is carried into the home by Preferreds (boat) and Associates (wake) Leverage successful JH positions with Neighborhood Events 3 Product/Segment selling skills - internal and externa
Slide 31: James Hardie Repair and Remodel Future State
31 James Hardie Repair and Remodel Future State
Slide 32: JH R&R Segment Future State
32 JH R&R Segment Future State The "middle third" of the market continues to be the primary target, but this crucial segment will only move to JH if we drive the market development If the early standard is vinyl it can be turned to JH, however, an early JH standard is unlikely to be pulled down to v
Slide 33: Future State - Neighborhood Approach
33 JH R&R Segment Future State - Neighborhood Approach Original Hot Mapping evolved into a more refined view of the markets
Slide 34: Future State - Neighborhood Approach
34 JH R&R Segment Future State - Neighborhood Approach Continuation of the model takes us to neighborhood and street level
Slide 35: Future State: Full Line Contractors/Craftsman
35 JH R&R Segment Future State Full Line Contractors/Craftsman Tear Down and Rebuild Architecture & Design key drivers JH Sweet Spot Wood-look arch. w/ JH durability JH substrate and factory finish JH look and durability w/ "value" Affordability more important JH must create standard directly Distin
Slide 36: JH Value Position
JH Value Position Top of "middle third" of the market Middle of the "middle third" of the market Lower end of the "middle third" of the market Replaces Thick cedar Wide variety of competing products: wood, vinyl, aluminum Wide variety of competing products: wood, vinyl, aluminum Drivers Architecture
Slide 37: Future State: Selling Models
37 JH R&R Segment Future State Preferred Remodelers James Hardie Sell/Outsource JH Siding Center Products Mainly JH C+ Full Wrap Artisan and JH "Value" All Products with emphasis on Artisan and JH "Value" Place All Markets - primarily in large middle market Upper and lower market segments where Hard
Slide 38: Future State - Contractor Programs
Future State - Contractor Programs Fragmented Contractor Base Large, diverse Contractor base requires 2 program approach Preferred Remodeler Program Associate Program Target Contractor Type Specialty Replacement Contractors Full Line Contractors, Smaller Contractors Application/Term. # Participants
Slide 39: Moving Away from Broad Based Marketing
39 JH R&R Segment Future State Continue to drive away from broad based marketing due to: A homeowner is in the re-side "buying window" on average only once in their lifetime, therefore, the message is wasted 90%+ the time We are trying to mainly influence the middle third of the market with the righ
Slide 40: Summary and Go Forward
40 JH R&R Segment Summary and Go Forward Summary and Go Forward
Slide 41: Summary and Go Forward
JH R&R Segment Summary and Go Forward Original assumptions are valid - JH can and is having an impact in R&R; both the Buyer and Seller are positively impacted when JH is presented as an affordable option Organizational Shift - we are getting the shift in focus with higher activity and conversion -
Slide 42: Summary and Go Forward
42 JH R&R Segment Summary and Go Forward Continue to convert the large middle market with C+ Full Wrap offering Extend presence into the upper and lower markets - proper product targeting and early, direct Hardie sales involvement Benefits and affordability message in the home continue to be key Sca
Slide 43: Questions
43 Questions
James Hardie Industries — Investor Day (September 2010) on 6ix