James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q4 FY2020 Earnings Presentation
50 slides from James Hardie Industries's earnings presentation, May 19, 2020
Slide 1: Q4 FY20 Management Presentation
Exhibit 99.5 Q4 FY20 MANAGEMENT PRESENTATION 19 May 2020
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q4 FY20 Results CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This Management Presentation contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securi
Slide 3: Cautionary Note on Forward-Looking Statements (continued)
James Hardie Q4 FY20 Results CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS (continued) Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook”
Slide 4: Use of Non-GAAP Financial Information; Australian Equivalent Terminology
James Hardie Q4 FY20 Results USE OF NON-GAAP FINANCIAL INFORMATION; AUSTRALIAN EQUIVALENT TERMINOLOGY This Management Presentation includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (US GAAP). The
Slide 5: Agenda
James Hardie Q4 FY20 Results AGENDA ◦ Q4 and Full Year FY20 Group Operating Review & Financial Results ◦ FY21 Strategy Update ◦ Questions and Answers Page 5
Slide 6: Today's Presenters
James Hardie Q4 FY20 Results TODAY'S PRESENTERS Dr. Jack Truong Chief Executive Officer Jason Miele Chief Financial Officer Page 6
Slide 7: Q4 and Full Year FY20 Group Operating Review & Financial Results
Q4 and Full Year FY20 Group Operating Review & Financial Results
Slide 8: Safety and Well-Being
James Hardie Q4 FY20 Results SAFETY AND WELL-BEING ◦Pandemic protocols in place, globally ◦Strict social distancing policy ◦Extensive disinfection and hygiene processes ◦24/7 PPE and hygiene kits ◦Sick leave and child care support ◦Work from home model utilized where applicable ◦Service our customer
Slide 9: FY20 Group Results Overview
James Hardie Q4 FY20 Results FY20 GROUP RESULTS OVERVIEW Q4 FY20 FY20 ◦Volume increased 7% in the quarter, led by 1,011.7 mmsf 3,841.7 mmsf 10% in North America Sales Volume 7 % 5 % a a ◦Adjusted EBIT grew 21% in the quarter, US$673.2 M US$2,606.8 M Net Sales driven by: 8 % 4 % • North America +26%
Slide 10: FY20 North America Summary
James Hardie Q4 FY20 Results FY20 NORTH AMERICA SUMMARY nd Q4 FY20 FY20 ◦Exteriors volume growth accelerated in the 2 655 mmsf 2,481.6 mmsf half of year Sales Volume 10 % 8 % • +11% for the quarter a a • +9% for the full year US$474.5 M US$1,816.4 M Net Sales Interiors volume growth continued to imp
Slide 11: FY20 Europe Summary
James Hardie Q4 FY20 Results FY20 EUROPE SUMMARY Q4 FY20 FY20 ◦Continued Fiber Cement growth in Euros 231.7 mmsf 827.5 mmsf • Net Sales +50% for the quarter Sales Volume 6 % 1 % • Net Sales +32% for the full year €93.3 M €334.2 M ◦Improved Fiber Gypsum growth in Euros Net Sales • Net Sales +3% for t
Slide 12: FY20 APAC Summary
James Hardie Q4 FY20 Results FY20 APAC SUMMARY Q4 FY20 FY20 ◦ Continued growth above market in Australia 125 mmsf 532.6 mmsf Sales Volume ◦ Q4 volume, gross profit and EBIT unfavorably impacted by -4 % -2 % mandatory lockdown in the Philippines and New Zealand a a due to COVID-19 A$146.1 M A$614.1 M
Slide 13: Cash Management and Liquidity
James Hardie Q4 FY20 Results CASH MANAGEMENT AND LIQUIDITY ◦ Operating Cash Flow up 48% in FY20 to US$451.2 million ◦ US$577.9 million of liquidity at 30 April 2020 ◦ Leverage ratio of 1.9x at 31 March 2020 ◦ Actions taken: • Drive Business Continuity 1 • Suspended dividends • FY21 Capital Expenditu
Slide 14: Improving and Securing Global Operations
James Hardie Q4 FY20 Results IMPROVING AND SECURING GLOBAL OPERATIONS As announced on 5 May 2020: ◦Closure of Summerville, SC plant, USA ◦Delayed commissioning of Prattville, AL plant, USA ◦Shifting to an import model in New Zealand ◦Exited the James Hardie Systems business, Australia ◦Temporary shu
Slide 15: Financial Impact of Actions Announced in May 2020
James Hardie Q4 FY20 Results FINANCIAL IMPACT OF ACTIONS ANNOUNCED ON 5 MAY 2020 ◦ Non-cash impairment expenses of US$84.4 million recorded in Q4FY20 • North America US$41.2 million • Asia Pacific US$36.3 million • Europe US$5.5 million • General Corporate Costs US$1.4 million ◦ Severance costs tota
Slide 16: Cash Flows and Capital Expenditures
James Hardie Q4 FY20 Results CASH FLOWS CAPITAL EXPENDITURES US$ Millions FY20 FY19 Change % Cash provided by operations 451.2 304 48 % 1 % Cash used in investing (203.8) (864.4) (76 ) Cash (used in) provided by financing (179.0) 364.2 Higher operating cash flow, up 48% CAPEX spend for the full year
Slide 17: Liquidity Profile at March 2020
James Hardie Q4 FY20 Results LIQUIDITY PROFILE AT 31 MARCH 2020 Strong balance sheet ◦ US$509.8 million of liquidity at 31 March 2020 Millions • US$144.4 million cash 1 • US$365.4 million available on revolving credit facility 3 ◦ US$1,210.2 million net debt 2 2 Corporate debt structure ◦ US$400 mil
Slide 18: FY21 Strategy Update
FY21 STRATEGY UPDATE
Slide 19: Current Strategic Priorities
James Hardie Q4 FY20 Results CURRENT STRATEGIC PRIORITIES Safe and Sustainable Work Environment Strong Liquidity and Financial Flexibility Gain Market Share Execute Lean Manufacturing Initiatives Develop High Impact Innovations Page 19
Slide 20: Full Exterior Solutions
James Hardie Q4 FY20 Results FULL EXTERIOR SOLUTIONS Page 20
Slide 21: Solutions from Starter to Custom Built Homes: Atlanta, USA
James Hardie Q4 FY20 Results SOLUTIONS FROM STARTER TO CUSTOM BUILT HOMES: ATLANTA, USA Page 21
Slide 22: Q1 FY21 Guidance and QTD Results
James Hardie Q4 FY20 Results Q1 FY21 GUIDANCE AND QTD RESULTS 1 1 April 2020 – 15 May 2020 Results ◦ NA Exteriors Volume: down 3% ◦ Australia Volume: flat ◦ Europe Volume: down 16% 2 Q1 FY21 Guidance ◦ NA Adjusted EBIT Margin range of 22%-27% in Q1 FY21 ◦ Liquidity greater than US$600 million at 30
Slide 23: Questions
Bre ala: QUESTIONS fav a
Slide 24: Appendix
APPENDIX
Slide 25: Group Results – 4th Quarter and Full Year FY20
James Hardie Q4 FY20 Results GROUP RESULTS – 4TH QUARTER AND FULL YEAR FY20 Q4 FY20 FY20 Volume and Net Sales 1,011.7 mmsf 3,841.7 mmsf Sales Volume ◦ Strong top line growth driven by volume growth in North 7 % 5 % America a a US$673.2 M US$2,606.8 M Net Sales 8 % 4 % Gross profit increased 14% for
Slide 26: North America Fiber Cement Summary
James Hardie Q4 FY20 Results NORTH AMERICA FIBER CEMENT SUMMARY Q4 FY20 FY20 ◦Exteriors volume continued growth above market 655 mmsf 2,481.6 mmsf • +11% for the quarter Sales Volume 10 % 8 % • +9% for the full year d d d d d d d d d US$474.5 M US$1,816.4 M ◦Continued momentum in Interiors business
Slide 27: APAC Summary
James Hardie Q4 FY20 Results APAC SUMMARY Q4 FY20 FY20 Volume 125 mmsf 532.6 mmsf Sales Volume ◦Volume growth above market in Australia -4 % -2 % d d d d d d d ◦Q4 volume unfavorably impacted by mandatory A$146.1 M A$614.1 M Net Sales government lockdown in the Philippines and NZ 2 % FLAT d d d d d
Slide 28: Europe Building Products Summary
James Hardie Q4 FY20 Results EUROPE BUILDING PRODUCTS SUMMARY Q4 FY20 FY20 Net Sales in Euros 231.7 mmsf 827.5 mmsf ◦ Fiber cement net sales +50% for Q4 Sales Volume 6 % 1 % ◦ Fiber cement net sales +32% for the full year d d d d d d d d d €93.3 M €334.2 M ◦ Fiber gypsum net sales +3% for Q4 Net Sal
Slide 29: Segment EBIT and Income Tax
James Hardie Q4 FY20 Results SEGMENT EBIT AND INCOME TAX Exited Windows business Committed to R&D investment 1 2 Higher stock compensation expense Adjusted ETR within our expectations 2 1 Excludes asset impairment charges and asbestos related expenses and adjustments Includes tax adjustments related
Slide 30: North America Fiber Cement EBIT Margin
James Hardie Q4 FY20 Results NORTH AMERICA FIBER CEMENT 1 1 1 EBIT Margin 1 Excludes asset impairment charges of US$41.2 million in Q4 FY20 and product line discontinuation expenses of US$5.4 million in Q2 FY19 FY20 EBIT Margin Excluding1 of 25.9% Page 30
Slide 31: North America Input Costs
James Hardie Q4 FY20 Results NORTH AMERICA INPUT COSTS ◦ The price of NBSK pulp down 18% compared to pcp ◦ Freight prices down 8% compared to pcp ◦ Cement prices up 1% compared to pcp ◦ Gas prices down 20% compared to pcp ◦ Electric prices flat compared to pcp The information underlying the table ab
Slide 32: North America Fiber Cement
James Hardie Q4 FY20 Results NORTH AMERICA FIBER CEMENT ◦FY20 strategic price increase effective April 2019 Page 32
Slide 33: Translation Impact on Consolidated Results
James Hardie Q4 FY20 Results TRANSLATION IMPACT ON CONSOLIDATED RESULTS 1 As reported Q4’20 and full year FY20 figures converted using Q4‘19 and full year FY19 average exchange rates, respectively 2 Reflects the difference between Q4’20 As Reported and Q4’20 using Q4’19 average exchange rates, as we
Slide 34: Asia Pacific Fiber Cement Results AUD vs USD
James Hardie Q4 FY20 Results ASIA PACIFIC FIBER CEMENT RESULTS AUD vs USD Three Months and Full Year Ended 31 March Q4 FY20 FY20 Results in Results in Impact of Results in Results in Impact of AUD USD FX AUD USD FX Average net sales price per unit +7% -2% -9% +4% -3% -7% (per msf) Net sales +2% -6%
Slide 35: Financial Summary
James Hardie Q4 FY20 Results FINANCIAL SUMMARY Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 % Change FY20 FY19 % Change Net sales North America Fiber Cement $ 474.5 $ 422.0 12 $ 1,816.4 $ 1,676.9 8 Asia Pacific Fiber Cement 95.8 102.3 (6) 418.4 446.8 (6) Europe Building Pro
Slide 36: Depreciation and Amortization
James Hardie Q4 FY20 Results DEPRECIATION AND AMORTIZATION Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 FY20 FY19 Depreciation and amortization North America Fiber Cement $ 22.7 $ 21.7 $ 88.7 $ 80.2 Asia Pacific Fiber Cement 3.3 3.0 12.7 12.8 Europe Building Products 10.6 4
Slide 37: Asbestos Compensation Key Points
James Hardie Q4 FY20 Results ASBESTOS COMPENSATION KEY POINTS ◦ Updated actuarial report completed as at 31 March 2020 • Undiscounted and uninflated estimate increased to A$1,452 million from A$1,400 million ◦ For fiscal year 2020, we noted the following related to asbestos-related claims experience
Slide 38: Net Post-Tax Unfunded Asbestos Liability
James Hardie Q4 FY20 Results NET POST-TAX UNFUNDED ASBESTOS LIABILITY A$ millions (except where stated) FY20 FY19 1,452.4 1,399.8 Central Estimate - Undiscounted and Uninflated $ $ Provision for claims handling costs of AICF 26.8 28.5 Cross claims and other 47.5 35.1 Net assets of AICF (90.7) (78.2)
Slide 39: Asbestos Claims Data
James Hardie Q4 FY20 Results ASBESTOS CLAIMS DATA Full year ended 31 March 2020 ◦ Net cash outflow was 5% below actuarial expectations ◦ Gross cash outflow was 1% above actuarial expectations ◦ Claims received were 16% above actuarial estimates and pcp primarily due to an increase in cross claims ◦
Slide 40: Asbestos Cash Movements for Full Year
James Hardie Q4 FY20 Results ASBESTOS CASH MOVEMENTS FOR FULL YEAR A$ millions AICF cash and investments - 31 March 2019 $ 81.1 Contributions to AFFA by James Hardie 156.7 Insurance recoveries 11.0 Interest income, net 2.4 Claims paid (153.3) Operating costs (4.0) AICF cash and investments - 31 Marc
Slide 41: Updated Actuarial Estimate
James Hardie Q4 FY20 Results UPDATED ACTUARIAL ESTIMATE Page 41
Slide 42: Non-US GAAP Financial Measures and Terms
James Hardie Q4 FY20 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 43: Non-US GAAP Financial Measures
James Hardie Q4 FY20 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 44: Non-US GAAP Financial Measures: Adjusted EBIT
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES Financial Measures – US GAAP equivalents Adjusted EBIT Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 FY20 FY19 EBIT $ (30.8) $ 22.7 $ 342.5 $ 351.6 Asbestos: Asbestos adjustments 67.0 73.4 58.2 22.0 AICF SG&A expens
Slide 45: Non-US GAAP Financial Measures: North America and Asia Pacific Segments
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES North America Fiber Cement Segment Adjusted EBIT excluding asset impairment charges and product line discontinuation expenses Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 FY20 FY19 North America Fiber Cement Segmen
Slide 46: Non-US GAAP Financial Measures: Europe Segment
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES Europe Building Products Segment Adjusted EBIT excluding asset impairments and costs associated with the acquisition Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 FY20 FY19 Europe Building Products Segment EBIT $ (4
Slide 47: Non-US GAAP Financial Measures: Adjusted Diluted EPS
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES Adjusted diluted earnings per share Three Months and Full Year Ended 31 March Q4 FY20 Q4 FY19 FY20 FY19 Adjusted net operating profit (US$ Millions) $ 86.6 $ 73.8 $ 352.8 $ 300.5 Weighted average common shares outstanding - 444.5 443.4 444.
Slide 48: Non-US GAAP Financial Measures: Adjusted EBITDA
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES Adjusted EBITDA excluding asbestos Three Months and Full Year Ended 31 March US$ Millions Q4 FY20 Q4 FY19 FY20 FY19 EBIT $ (30.8) $ 22.7 $ 342.5 $ 351.6 Depreciation and amortization 37.7 30.7 131.5 119.4 Adjusted EBITDA $ 6.9 $ 53.4 $ 474.
Slide 49: Non-US GAAP Financial Measures: Adjusted ROCE
James Hardie Q4 FY20 Results NON-US GAAP FINANCIAL MEASURES Adjusted return on capital employed (Adjusted "ROCE") Full Year Ended 31 March1 US$ Millions FY20 FY19 Numerator: Adjusted EBIT $ 486.8 $ 404.6 Adjustments to EBIT2 — (7.3) Adjusted EBIT for ROCE $ 486.8 $ 397.3 Denominator: Gross capital e
Slide 50: Q4 FY20 Management Presentation
Q4 FY20 MANAGEMENT PRESENTATION 19 May 2020
James Hardie Industries — Q4 FY2020 Earnings Presentation on 6ix