James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (August 2012)
38 slides from James Hardie Industries's investor presentation, Aug 3, 2012
Slide 1: Investor Presentation July 2012
Exhibit 99.2 INVESTOR PRESENTATION July 2012
Slide 2: Disclaimer
DISCLAIMER 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, invitation
Slide 3: Agenda
AGENDA Business overview USA and Europe Fibre Cement Asia Pacific Fibre Cement Group Outlook Summary Appendix 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 of
Slide 4: James Hardie: A Growth Focused Company
JAMES HARDIE: A GROWTH FOCUSED COMPANY Annual net sales US$1.2b Total assets US$1.7b Net cash US$265.4m Operations in North America, Asia Pacific and Europe 2,600 employees Market cap US$3.4b S&P/ASX 100 company NYSE ADR listing Note: Net sales, total assets and net cash are at 31 March 2012. Total
Slide 5: James Hardie – World Leader in Fibre Cement
JAMES HARDIEA –WORLD LEADER IN FIBRE CEMENT USA Fibre Cement Products Siding Soffit Fascia Trim Asia Pacific Fibre Cement Products Backerboard Residential siding Commercial exteriors Flooring Ceiling and internal walls 5
Slide 6: Global Business Portfolio
GLOBALBUSINESS - PORTFOLIO 100% 90% 80% 70% 60% 77% 70% 67% 50% 40% 30% 20% 30% 33% 23% 10% 0% Volume Sales EBIT* USA and Europe Fibre Cement Asia-Pacific Fibre Cement At and for the nine months ended 31 May 2012 * EBIT – Excludes Research and Development EBIT and Asbestos-related items 6
Slide 7: Fibre Cement – Superior Product Performance
FIBRECEMENT – SUPERIOR PRODUCT PERFORMANCE 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 Fibre cement Vinyl Engineered wood Fire resistant Hail resistant Resists warping Resists buckling Colour l
Slide 8: Group Overview
GROUP OVERVIEW The net operating result excluding asbestos, ASIC expenses, asset impairments and tax adjustments for the full year increased 20% to US$140.4 million The 4th quarter and full year results include an income tax benefit of US$485.2 million resulting from RCI’s successful appeal of the A
Slide 9: The USA Business – Largest Fibre Cement Producer in North America
THEUSABUSINESS – LARGEST FIBRECEMENT PRODUCER INNORTHAMERICA Plant locations JH Plant Design Capacity Flat Sheet Capacity Plants (mmsf) Tacoma, WA Plants operating Cleburne, Texas 500 Peru, IL Blandon, PA Peru, Illinois 560 Plant City, Florida 300 Reno, NV Pulaski, Virginia 600 Pulaski, VA Reno, Nev
Slide 10: US Exterior Cladding Market
US EXTERIOR CLADDING MARKET Large growth opportunity 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:
Slide 11: USA and Europe Fibre Cement
USA AND EUROPE FIBRE CEMENT EBIT and EBIT Margin 1 140 35 120 30 100 25 80 20 60 15 40 10 20 5 0 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 EBIT EBIT Margin 1 Excludes impairment charges of US$45.6 million in Q4 FY08 and US$14.3 million in Q4 FY12 11
Slide 12: USA Fibre Cement Top Line Growth
USA FIBRE CEMENT Top Line Growth 3,000 $1,300 2,800 $1,200 2,600 $1,100 2,400 $1,000 2,200 2,000 $900 1,800 $800 1,600 $700 1,400 $600 1,200 $500 1,000 $400 800 $300 600 400 $200 200 $100 0 $0 JH Volume Housing Starts JH Revenue Rolling 12 month average of seasonally adjusted estimate of housing sta
Slide 13: USA and Europe Fibre Cement Average Net Sales Price
USA AND EUROPE FIBRE CEMENT Average Net Sales Price (US dollars) 680 US$647 640 600 560 520 480 440 400 360 FY06 FY07 FY08 FY09 FY10 FY11 FY12 13
Slide 14: Total USA Housing Starts
TOTAL USA HOUSING STARTS US CENSUS – U.S. Housing Starts Calendar Quarters Source: US Census Bureau - New Privately-Owned Housing Units Started 14
Slide 15: Response to US Housing Downturn
RESPONSE TO US HOUSING DOWNTURN 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 c
Slide 16: Product Leadership Example – ColorPlus
PRODUCT LEADERSHIP EXAMPLE – COLORPLUS® ColorPlus® 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 streams Strategy designed to reduce ‘on the wall’ cost and close gap with viny
Slide 17: Product Leadership Example – HardieZone System
PRODUCT LEADERSHIP EXAMPLE HARDIEZONE™ – SYSTEM th nd 7 Generation versus 2 Generation generic fibre cement The HardieZone™ System represents a logical extension of Hardie technology 17
Slide 18: Asia Pacific Fibre Cement
ASIA PACIFIC FIBRE CEMENT Five manufacturing plants in Asia Pacific Net sales US$376m EBIT US$156m Higher value differentiated products Lower delivered cost Growth model Asia Pacific manufacturing facilities. Net Sales and EBIT as at 31 March 2012. 18
Slide 19: Asia Pacific Fibre Cement – Examples
ASIAPACIFICFIBRECEMENT – EXAMPLES Ceilings and partitions Exterior cladding Philippines Australia New Zealand Australia Interior walls General purpose flooring 19
Slide 20: Group Outlook
GROUP OUTLOOK United States While some encouraging industry data points emerged during the final quarter of the 2012 financial year, the company is planning for the market to be up only slightly over the prior year Pulp and freight costs are expected to remain at elevated levels when compared to his
Slide 21: Capital Management
CAPITAL MANAGEMENT Active Approach 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 enabled the Board to announce in May 20
Slide 22: Summary
SUMMARY We have a strong, well-established, growth-focused, strong cash-generating 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 commitm
Slide 23: Appendix
) James Hardie APPENDIX
Slide 24: Global Strategy
GLOBAL STRATEGY Industry leadership and profitable growth Aggressively grow demand for our products in targeted market segments Grow our overall market position while defending our share in existing market segments Introduce differentiated products to deliver a sustainable competitive advantage 24
Slide 25: Group Outlook – Key Priorities
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® and Trim products Continue to rollout our job pack distri
Slide 26: USA and Europe Fibre Cement Primary Growth Performance
USA AND EUROPE FIBRE CEMENT Primary Growth Performance All market and market share figures are management‘s estimates. 26
Slide 27: Key Ratios
KEY RATIOS * FY2012 FY 2011 FY 2010 1, 3 EPS (Diluted) 32.1c 26.7c 30.5c Dividend Paid per share 4.0c N/A N/A Return on Shareholders’ Funds 1, 3 10.9% 10.0% 13.3% Return on Capital Employed 2, 3 20.4% 19.7% 17.4% 2 EBIT/ Sales (EBIT margin) 15.3% 15.8% 18.6% 1 Gearing Ratio -24.5% 3.2% 10.9% 2 Net I
Slide 28: USA and Europe 5 Year Results Overview
USA AND EUROPE 5 YEAR RESULTS OVERVIEW FY07 FY08 FY09 FY10 FY11 FY12 Net Sales 1,262 1,144 910 828 814 862 US$m Sales Volume 2,148 1,916 1,508 1303 1,248 1332 mmsf Average 588 597 604 635 652 647 Price US$ per msf EBIT 362 313 200 208 160 156 US$m EBIT Margin 29 27 22 25 20 19 % 28
Slide 29: Asia Pacific 5 Year Results Overview
ASIA PACIFIC 5 YEAR RESULTS OVERVIEW FY07 FY08 FY09 FY10 FY11 FY12 Net Sales 223 298 273 296 353 376 US$m Sales Volume 390 398 390 389 407 392 mmsf Average 842 862 879 894 916 916 Price A$ per msf EBIT 39 50 47 58 79 79 US$m EBIT Margin 16 17 17 20 23 21 % 29
Slide 30: Endnotes
ENDNOTES 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 Consolidated Financial Statements. Definitions Non-financ
Slide 31: Endnotes (continued)
ENDNOTES (CONTINUED) 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) divide
Slide 32: Non-US GAAP Financial Measures
NON-USGAAPFINANCIAL MEASURES EBIT and EBIT margin excluding asbestos, asset impairments and ASIC expenses – EBIT and EBIT margin excluding asbestos, asset impairments and ASIC expenses are not measures of financial performance under US GAAP and should not be considered to be more meaningful than EBI
Slide 33: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Net operating profit excluding asbestos, asset impairments, ASIC expenses and tax adjustments – Net operating profit excluding asbestos, asset impairments, ASIC expenses and tax adjustments is not a measure of financial performance under US GAAP and should
Slide 34: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Non-US GAAP Financial Measures (continued) Diluted earnings per share excluding asbestos, asset impairments, ASIC expenses and tax adjustments – Diluted earnings per share excluding asbestos, asset impairments, ASIC expenses and tax adjustments is not a mea
Slide 35: Non-US GAAP Financial Measures (continued)
NON-US GAAP FINANCIAL MEASURES (CONTINUED) Effective tax rate excluding asbestos, asset impairments and tax adjustments – Effective tax rate excluding asbestos, asset impairments and tax adjustments is not a measure of financial performance under US GAAP and should not be considered to be more meani
Slide 36: 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. N
Slide 37: 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
Slide 38: Investor Presentation
INVESTOR PRESENTATION July 2012
James Hardie Industries — Investor Presentation (August 2012) on 6ix