James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (September 2011)
38 slides from James Hardie Industries's investor presentation, Sep 16, 2011
Slide 1: Investor Presentation September 2011
Investor Presentation September 2011
Slide 2: Disclaimer
DISCLAIMER 2 This Management 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 SEC, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitatio
Slide 3: Agenda
3 Business overview USA and Europe Fibre Cement Asia Pacific Fibre Cement Group Outlook Summary Appendix AGENDA In this Management Presentation, James Hardie may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures included in the Definitions section o
Slide 4: James Hardie - A World Leader in Fibre Cement
4 JAMES HARDIE - A WORLD LEADER IN FIBRE CEMENT USA Fibre Cement Products Siding Soffit Fascia Trim Backerboard Asia Pacific Fibre Cement Products Residential siding Commercial exteriors Flooring Ceiling and internal walls
Slide 5: Fibre Cement - Superior Product Performance
5 Fibre cement is more durable than wood and engineered wood, and looks and performs better than vinyl, and cheaper and quicker to build with than brick Vinyl Fire resistant Hail resistant Resists warping Resists buckling Colour lasts longer Dimensional stability Can be repainted ? ? ? ? ? ? ? ? ? ?
Slide 6: James Hardie: A Growth Focused Company
6 Annual net sales US$1.3b Total assets US$1.4b Net debt US$26.9m Operations in North America, Asia Pacific and Europe 2,500 employees Market cap US$2.6b S&P/ASX 100 company NYSE ADR listing Note: Net sales (annualised), total assets and net debt are at 30 June 2011. Total assets exclude asbestos co
Slide 7: 1st Quarter FY12 Results - Group Overview
1ST QUARTER FY12 RESULTS - GROUP OVERVIEW 7 1st quarter operating results reflect the low demand US operating environment, a softer residential construction market in Australia, higher freight and input costs (primarily pulp) partially offset by the higher value of the Asia Pacific businesses' curre
Slide 8: Business Portfolio
8 BUSINESS PORTFOLIO At and for the three months ended 30 June 2011 * EBIT - Excludes Research and Development EBIT and Asbestos-related items USA and Europe Fibre Cement Asia-Pacific Fibre Cement 69% 31% 77% 23% 70% 30% Volume Sales EBIT*
Slide 9: The USA Business - Largest Fibre Cement Producer in North America
9 Flat Sheet Plants Capacity (mmsf) Plants operating at August 2011 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 August 2011 Blandon, Pennsylvania1 200 Fontana, California1 180 S
Slide 10: US Exterior Cladding Market
US EXTERIOR CLADDING MARKET Note: 1) Market share figures reflect siding only; exclude fascia, soffits & trim; data reflects Repair & Remodel and New Construction markets, combined. 2) Siding volumes exclude waste factors, a change from previously reported numbers. Sources: NAHB Builder Practices an
Slide 11: USA and Europe Fibre Cement
USA AND EUROPE FIBRE CEMENT * Excludes impairment charges of US$45.6 million in Q4 FY08 11 EBIT and EBIT Margin* EBIT EBIT Margin
Slide 12: USA Fibre Cement
USA FIBRE CEMENT 12 Rolling 12 month average of seasonally adjusted estimate of housing starts by US Census Bureau
Slide 13: Average Net Sales Price - USA and Europe Fibre Cement
Average Net Sales Price US$ per MSF USA AND EUROPE FIBRE CEMENT 13 US$661
Slide 14: Total USA Housing Starts - US Census Bureau
14 TOTAL USA HOUSING STARTS - US CENSUS BUREAU There is no evidence of a sustainable recovery in US housing Month-to-month performance is more stable in FY12
Slide 15: Response to US Housing Downturn
15 Focus on primary demand growth and cost management Business re-set to balance supply and demand production suspended at Blandon PA (November 2007), Summerville SC (November 2008) plants and Fontana CA (December 2008) corporate-wide review of activities, projects and cost-saving opportunities chan
Slide 16: Product Leadership Example - ColorPlus
16 ColorPlus(r) Collection (pre-painted siding and trim): Driving growth against vinyl in Northern USA Launched in Western and Southern USA FY07 Higher value products with higher revenue stream Strategy designed to reduce 'on the wall' cost and close gap with vinyl siding Supply of pre-painted exter
Slide 17: Product Leadership Example - HardieZone System
17 17 7th Generation versus 2nd Generation generic fibre cement The HardieZone(tm) System represents a logical extension of Hardie technology PRODUCT LEADERSHIP EXAMPLE - HARDIEZONE(tm) SYSTEM
Slide 18: Asia Pacific Fibre Cement
18 Five manufacturing plants in Asia Pacific Net sales US$375.2m EBIT US$84.4m Higher value differentiated products Lower delivered cost Shift to growth model ASIA PACIFIC FIBRE CEMENT Asia Pacific manufacturing facilities. Net Sales and EBIT as at 30 June 2011 and annualised.
Slide 19: Asia Pacific Fibre Cement - Examples
19 ASIA PACIFIC FIBRE CEMENT - EXAMPLES General purpose flooring Exterior cladding Philippines Australia New Zealand Australia Ceilings and partitions Interior walls
Slide 20: Group Outlook - Key Priorities
20 GROUP OUTLOOK Key Priorities The company's key medium term priorities in the US are: Grow primary demand and exterior cladding market share - with focus on repair and remodel and non-metro markets Increase market penetration of our ColorPlus(r) and Trim products Overall Group Strategy The company
Slide 21: Group Outlook
GROUP OUTLOOK 21 United States Weak recovery driven by low consumer confidence The flow of foreclosed homes into the market continues, house values continue to decline, credit conditions remain restrictive and the broader economic recovery remains relatively weak and uncertain Freight and input cost
Slide 22: Global Strategy
22 Aggressively grow demand for our products in targeted market segments Grow our overall market position while defending our share in existing market segments Offer products with superior value to that of our competitors Introduce differentiated products to deliver a sustainable competitive advanta
Slide 23: Summary
We have a strong, well-established, growth-focused and high return business We have a sustainable competitive advantage Our model for strong growth is based on: Large market opportunity Superior value proposition Proprietary and/or protected technology Ongoing commitment to research and development
Slide 24: Appendix
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Slide 25: Key Ratios
KEY RATIOS 25 1 Excludes asbestos adjustments, AICF SG&A expenses, AICF interest income, gain or impairment on AICF investments, tax benefits related to asbestos adjustments, ASIC expenses and tax adjustments 2 Excludes asbestos adjustments, AICF SG&A expenses and ASIC expenses 3 Includes restricted
Slide 26: USA and Europe Fibre Cement
USA AND EUROPE FIBRE CEMENT Primary Growth Performance 26 All market and market share figures are management estimates.
Slide 27: Guidance
27 GUIDANCE Challenges remain, with the operating environment in the US, in particular, still weak and uncertain and the Australian construction market softening Management anticipates FY12 full year earnings excluding asbestos, ASIC expenses and tax adjustments to be within the analysts' range of U
Slide 28: Capital Management
28 The reduced level of debt, along with a reduction in the number of company specific contingencies and a strengthened confidence in the business' ability to adapt and meet the challenges of the low demand operating environment has enabled the Board to announce in May 2011 the resumption of an acti
Slide 29: Legacy Issues Update
29 LEGACY ISSUES UPDATE Australian Tax Office (ATO) - 1999 Disputed Amended Assessment James Hardie's subsidiary RCI's initial appeal dismissed in September 2010 by Federal Court in Australia Charge of US$345.2 million effective 1 September 2010 (no impact on net operating cash flow in FY11) Followi
Slide 30: Legacy Issues Update (continued)
30 LEGACY ISSUES UPDATE (CONTINUED) ASIC Proceedings Court of Appeal judgement handed down on 17 December 2010 Company's appeal dismissed Non-executive directors' appeals upheld ASIC and one former executive granted special leave to appeal to the High Court of Australia High Court appeal hearing sch
Slide 31: Endnotes
31 ENDNOTES This Management Presentation should be read in conjunction with the following documents: Form 20F filed with the US Securities and Exchange Commission, and the Q1 FY12 results material including a Media Release, Condensed Consolidated Financial Statements, Management's Analysis of Result
Slide 32: Definitions - Sales Volumes and Financial Ratios
Sales Volumes mmsf - million square feet, where a square foot is defined as a standard square foot of 5/16" thickness. msf - thousand square feet, where a square foot is defined as a standard square foot of 5/16" thickness. Financial Ratios Gearing Ratio - Net debt (cash) divided by net debt (cash)
Slide 33: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures EBIT and EBIT margin excluding asbestos and ASIC expenses- EBIT and EBIT margin excluding asbestos and ASIC expenses are not measures of financial performance under US GAAP and should not be considered to be more meaningful than EBIT and EBIT margin. Management has inc
Slide 34: Non-US GAAP Financial Measures (continued)
Non-US GAAP Financial Measures (continued) Net operating profit excluding asbestos, ASIC expenses and tax adjustments- Net operating profit excluding asbestos, ASIC expenses and tax adjustments is not a measure of financial performance under US GAAP and should not be considered to be more meaningful
Slide 35: Non-US GAAP Financial Measures (continued)
Non-US GAAP Financial Measures (continued) Diluted earnings per share excluding asbestos, ASIC expenses and tax adjustments- Diluted earnings per share excluding asbestos, ASIC expenses and tax adjustments is not a measure of financial performance under US GAAP and should not be considered to be mor
Slide 36: Non-US GAAP Financial Measures (continued)
Non-US GAAP Financial Measures (continued) Effective tax rate excluding asbestos and tax adjustments- Effective tax rate excluding asbestos and tax adjustments is not a measure of financial performance under US GAAP and should not be considered to be more meaningful than effective tax rate. Manageme
Slide 37: Non-US GAAP Financial Measures (continued)
Non-US GAAP Financial Measures (continued) EBITDA- is not a measure of financial performance under US GAAP and should not be considered an alternative to, or more meaningful than, income from operations, net income or cash flows as defined by US GAAP or as a measure of profitability or liquidity. No
Slide 38: Non-US GAAP Financial Measures (continued)
Non-US GAAP Financial Measures (continued) General corporate costs excluding ASIC expenses and domicile change related costs- General corporate costs excluding ASIC expenses and domicile change related costs is not a measure of financial performance under US GAAP and should not be considered to be m
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