James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Investor Presentation (March 2003)
30 slides from James Hardie Industries's investor presentation, Mar 26, 2003
Slide 1: High Growth From Unique Technology
James Hardie High Growth From Unique Technology March 2003
Slide 2: The World Leader In Fibre Cement
James Hardie The World Leader In Fibre Cement > Predecessor company established 1888 > Listed on ASX 1951 > Paid a dividend every year > Developed fibre cement 1980s ~ world first > Entered USA market late 1980s > Restructured for growth 1996 - 2002
Slide 3: An Emerging Growth Company
James Hardie An Emerging Growth Company > Annual turnover US$800m > Total assets US$800m > 21 operations in 6 countries i > 2,400 employees > Market cap US$1.6 billion (A$3 billion) > ASX Top 50 company > NYSE listed ADRs
Slide 4: Global Potential
Global Potential Net Sales (US$ million) FY03 YTD Other (1%) tenes oil Wh rome ee lA we reat pootll ine " Py 7, 7 Asia Pacitic, vases a 1D ccctonss aria Gl 2 * 2 Seon ead
Slide 5: High growth
High growth Unique proprietary technology Sustainable competitive advantage Strong cashflows and balance sheet Low cyclical risk Strong execution through relentless will to win
Slide 6: James Hardie pioneered the development of fibre cement technology in the 1980s
James Hardie pioneered the development of fibre cement technology in the 1980s neem Fibre Cement | Portland: Cement Cellulose Fibre
Slide 7: Applications
VV Vv VOVOVOVOVO OV OY pplications External siding/soffit lining Internal wall/floor wet area lining] Trim and fascia Ceiling lining and flooring External/internal wall systems Partitioning Commercial facades Decorative columns Fencing Drainage pipes
Slide 8: Sustainable Competitive Advantage
Sustainable Competitive Advantage > Unique plant engineering and proprietary process technology and product formulations Superior capital cost efficiency -- plant capital cost 4 that of competitors Largest, lowest cost manufacturer — plant operating cost 20-30% lower than competitors Only national p
Slide 9: R&D is a Key Driver of Growth
Creating the F Future R&D is a Key Driver of Growth > Capabilities and resources - 120 scientists, engineers and technicians - 30% increase in spend to US$21 million in FY03 — 3% of sales > Core projects - new proprietary engineered raw materials - new proprietary product formulations - new engineer
Slide 10: Vision and Strategy
Vision and Stra ay industry Leadership and Profitable Growth > Aggressively grow the market for fibre cement > Secure differentiated positions by leveraging: - technology - products - scale - cost ~ market position - brand recognition > Targets - rapid growth, high volume, largest share > Sustain at
Slide 11: Volume Growth, Sales Growth, Average Price, EBIT Margin
Volume Growth (mmsf) 800) sales Growth USSM 480 460 440 420 400 380+ 3/90 YEAR 12/02 1998 1999 2000 2001 2002 YTDO3 Average Price US$/msf 4 EBIT Margin %* 1998 1999 2000 2001 2002 YTDO3 1998 1999 2000 2001 2002 YTDO3 "4 * Before restructuring and other operating expenses
Slide 12: Largest and Lowest Cost
Largest and Lowest Cost James Hardie has a unique advantage in North America — the largest framed construction market in the world Plant Locations ’ Plant Capacity : Flat Sheet Capacity Plants (mmsf) Fontana, California 180 Plant City, Florida 300 Cleburne, Texas 500 Tacoma, Washington 200 Peru, Ill
Slide 13: USA - Total Siding Market Share
USA - Total Siding Market Share 1994 2002 Fibre Cement 1% Fibre Cement 13% Hardboard 13% oh 9% Brick 8% Masonry 3% Plywood/Other 6% 43
Slide 14: Fibre Cement is more durable than wood and engineered wood
Fibre Cement is more durable than wood and engineered wood Superior Fibre Cement Durability Engineered Wood Moisture Resistant Fire Resistant Weather Resistant Termite Proof Won't Warp Worrt Crack Won't Rot Holds Paint Longer 2c enna ee & Wort Delaminate 44
Slide 15: Superior Product Performance
‘Superior Product Performance Fibre Cement looks and performs better than vinyl Fibre Cement v Fire Resistant ? v Hail Resistant ? vw Wind Resistant ? v Wort Warp ? v Won't Buckle e “ ColourLasts Longer 7? vw Strong and Rigid ? v Expands/Contracts ? v Withstands Impact 3 w Dimensional Stability 7 v
Slide 16: Product Performance: ColorPlus pre-painted siding
roduct Performance| > ColorPlus™ pre-painted siding - Helps take share from vinyl - Lifts selling prices - Lifts margins
Slide 17: Low Shares of Large Markets
Low Shares of Large Markets Product Category Market Size (bsf) New Construction - Siding, Fascia & Soffits 3.5 - Trim 1.3 Total New 4.8 Repair & Remodel - Siding, Fascia & Soffits 3.9 - Trim 1.6 Total R&R 5.4 Grand Total 10.2 bsf bsf = JH standard feet in billion square feet 47
Slide 18: USA Exterior Products Market
2002 USA Exterior Products Market 10.2 bsf Repair & Remodel James Hardie ~ Sales Mix New vs R&R Remodel 20% 2007 USA Exterior Products Market 11.0 bsf [Repair & Remodel | Sh James Hardie — Sales Mix New vs R&R Reet cy Remodel (20% 48
Slide 19: Exterior Products North/South Sales Mix
Exterior Products 2002 James Hardie North/South Sales Mix Exterior Products 2007 ' James Hardie North/South : ae Sales Mix ; 49
Slide 20: Overall Share Could Double in Years
Overall Share Could Double in 5 Years 2002 2007 James Hardie Share James Hardie Share USA Exterior Products Market USA Exterior Products Market 10.2 bsf 11.0 bsf James _ Hardie 20% 20
Slide 21: Backer Could Grow Even Faster
‘Backer Could Grow Even Faster 2002 USA Interior Cement Board Market 0.95bsf 2007 USA Interior Cement Board Market 1ibst _ James Hardie | 40% my cn 24
Slide 22: Australia/New Zealand
Australia/New Zeal : Grow the market > Increase category share > Higher value differentiated products > Streamline the organisation > Simplify the business > Lower delivered cost > Lower SG&A > Improve quality consistency > High performance culture > Increase revenue and margins 22
Slide 23: New Growth Horizons: Philippines and Asia
New Growth Horizons Philippines and Asia > Manufacturing plant commissioned 1999 > YTDO3 sales US$13.2 million > Fibre cement as substitute for plywood > 26% domestic market share > Exports to Korea, Taiwan and Hong Kong > Establishing low cost regional manufacturing hub
Slide 24: New Growth Horizons: Chile and South America
__ New Growth Horizons Chile and South America > Manufacturing plant commissioned 2001 > Low cost manufacturing, rapid market penetration > From zero base, our target is market leadership > 20% + share already achieved > Longer term, regional business planned in South America > Targeting US$100 ~ US
Slide 25: New Growth Horizons: Pipes
New Growth Horizons Pipes > USA manufacturing plant commissioned 2001 > Product has advantages over reinforced steel concrete pipes > Lower cost fo make and install > Long term targets - national business - 4-5 manufacturing plants - large share of US$2 billion market
Slide 26: New Growth Horizons: Roofing
New Growth Horizons Roofing > USA market entry planned > Development of fibre cement roofing technology > US roofing market 11 bsf (US siding market 10.2 bsf) > Initial target market 1.5 bsf ~ to cornpete with wood shake - superior durability and fire performance > US$12m pilot plant being commissio
Slide 27: Longer Term
Longer Term > Worldwide trend towards lightweight, framed construction and more energy-efficient materials Fibre cement replacing asbestos cement in the global cement board market (still 2/3rds asbestos cement) Wood based products becoming more expensive Oil based products (vinyl) becoming more expe
Slide 28: High Growth and Attractive Returns Targeted
High Growth and Attractive Returns Targeted Revenue growth > 15% p.a. EBIT Margins > 15% ROA > 15%
Slide 29: Disclaimer
Disclaimer This presentation contains forward-looking statements. Words such as “believe,” “anticipate,” "plan," “expect,” “intend,” “target,” “estimate,” "project," "predict," "forecast," "guideline," “should,” “aim” and similar expressions are intended to identify forward-looking statements but ar
Slide 30: High Growth From Unique Technology
James Hardie High Growth From Unique Technology March 2003
James Hardie Industries — Investor Presentation (March 2003) on 6ix