James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q3 FY2022 Earnings Presentation
41 slides from James Hardie Industries's earnings presentation, Feb 7, 2022
Slide 1: Q3 FY22 Management Presentation
Q3 FY22 MANAGEMENT PRESENTATION 7 February 2022
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q3 FY22 Results CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This Management Presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. James Hardie Industries plc (the “Comp
Slide 3: Agenda
James Hardie Q3 FY22 Results AGENDA • Strategy Update • Q3 FY22 Financial Results Harold Wiens Jason Miele Interim CEO CFO • AICF Funding Update • Guidance • Questions and Answers Sean Gadd Ryan Kilcullen North America President Executive Vice President, Global Operations Page 3
Slide 4: Strategy Update
STRATEGY UPDATE
Slide 5: Drive Profitable Growth Globally
James Hardie Q3 FY22 Results DRIVE PROFITABLE GROWTH GLOBALLY 1 Market to Homeowners to Create Demand 2 Penetrate and Drive Profitable Growth in Existing and New Segments 3 Commercialize Global Innovations by Expanding Into New Categories Continued Execution and Expansion of Foundational Initiatives
Slide 6: Brand Partner Update: Chip and Joanna Gaines
James Hardie Q3 FY22 Results BRAND PARTNER UPDATE: CHIP AND JOANNA GAINES Magnolia / Chip & Joanna Gaines Social Media Presence 23.8 million followers @magnolia 5.4 million followers @joannagaines 13.4 million followers @chipgaines 5.0 million followers >2.8 Million Followers >6 Million Followers TV
Slide 7: Innovation Update: Hardie Architectural Collection
James Hardie Q3 FY22 Results INNOVATION UPDATE: HARDIE™ ARCHITECTURAL COLLECTION Introducing the Hardie™ Architectural Collection • Launches with a first generation of new products, an integrated solution of five Hardie™ Architectural Panels and associated Hardie™ Architectural Trims • Designed in c
Slide 8: Hardie Architectural Panel - Sculpted Clay
James Hardie Q3 FY22 Results HARDIE® ARCHITECTURAL PANEL - SCULPTED CLAY Visit https://www.jameshardie.com/blog/ibs-2022 for additional details about the Hardie™ Architectural Collection and for updates throughout the International Builders’ Show – Feb 8th – 10th Page 8
Slide 9: Hardie Architectural Panel - Sea Grass
James Hardie Q3 FY22 Results HARDIE® ARCHITECTURAL PANEL - SEA GRASS Visit https://www.jameshardie.com/blog/ibs-2022 for additional details about the Hardie™ Architectural Collection and for updates throughout the International Builders’ Show – Feb 8th – 10th Page 9
Slide 10: Drive High Value Product Mix in North America
James Hardie Q3 FY22 Results DRIVE HIGH VALUE PRODUCT MIX IN NORTH AMERICA NA Price/Value Matrix NA Volume Mix Price Average Net Sales Price (US$/MSF) $2,000 Hardie market-led Innovations (e.g. Hardie™ Architectural Collection) $1,500 Hardie® Exteriors w/ ColorPlus® Technology $1,000 Hardie® Exterio
Slide 11: Penetrate and Drive Growth in Repair & Remodel Segment – North America
James Hardie Q3 FY22 Results PENETRATE AND DRIVE GROWTH IN REPAIR & REMODEL SEGMENT – NORTH AMERICA Marketing Directly Enhancing Credibility Partnering With Right Products to the Homeowner via Brand Partners Customers Hardie® ColorPlus® Technology Hardie™ Architectural Collection Large and Growing S
Slide 12: Global Capacity Expansion
James Hardie Q3 FY22 Results GLOBAL CAPACITY EXPANSION Europe Capacity Expansion − Fiber Gypsum brownfield expansion in Orejo, Spain (Q4 FY24) − Fiber Cement greenfield expansion North America Capacity Expansion − Summerville restart (Q4 FY22) − Prattville Trim finishing (Q2 FY23) − Massachusetts Co
Slide 13: Q3 FY22 Financial Results
Q3 FY22 FINANCIAL RESULTS aa Ne
Slide 14: Global Results
James Hardie Q3 FY22 Results GLOBAL RESULTS Q3 FY22 9 Months FY22 • 22% increase in Group Net Sales 1,154.4 mmsf 3,478.4 mmsf Sales Volume +9% +16% • All 3 regions are executing on the Global US$900.0 M US$2,646.5 M Net Sales +22% +26% Strategy simultaneously: • Foundational initiatives: HMOS, Push/
Slide 15: North America Summary
James Hardie Q3 FY22 Results NORTH AMERICA SUMMARY Q3 FY22 9 Months FY22 • 24% increase in Net Sales led by Price/Mix 776.8 mmsf 2,296.7 mmsf Sales Volume +12% +15% and volume growth • Continued execution in driving High Value Price/Mix +12% +10% Product penetration with our customers US$644.9 M US$
Slide 16: Europe Summary
James Hardie Q3 FY22 Results EUROPE SUMMARY Q3 FY22 9 Months FY22 • 14% increase in Net Sales underpinned by 223.2 mmsf 710.7 mmsf Sales Volume +1% +14% strong Price/Mix • Continued execution in driving High Value Product Price/Mix +13% +10% penetration, specifically strong Fiber Cement growth €97.6
Slide 17: APAC Summary
James Hardie Q3 FY22 Results APAC SUMMARY Q3 FY22 9 Months FY22 • 20% increase in Net Sales growth driven by 154.4 mmsf 471.0 mmsf Sales Volume +9% +19% strong Price/Mix and volume growth • Continued execution in driving High Value Price/Mix +11% 3% Product penetration A$196.5 M A$577.2 M Net Sales
Slide 18: AICF Funding Update
AICF FUNDING UPDATE
Slide 19: AICF Funding Update
James Hardie Q3 FY22 Results AICF FUNDING UPDATE Per the terms of the Amended Final Funding Agreement (“AFFA”), JHX is required to make an annual contribution to the Asbestos Injuries Compensation Fund (“AICF”). Per the terms of the AFFA, the JHX contribution to the AICF must be the lower of two cal
Slide 20: AICF Funding Update: Cash and Claims
James Hardie Q3 FY22 Results AICF FUNDING UPDATE AICF Cash and Investments Balance (A$) Since inception of the AICF through 1 350 300 February 2022, JHX has contributed over 300 253 A$1.8 billion to the AICF 250 A$ Millions 200 173 150 As of 4 January 2022, the AICF holds ~A$300 100 81 94 million in
Slide 21: Guidance
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Slide 22: Full Year Fiscal Year 2022 Guidance
James Hardie Q3 FY22 Results FULL YEAR FISCAL YEAR 2022 GUIDANCE Management raises full year FY22 Adjusted Net Income1 guidance to a range of: US$620 million and US$630 million (From US$605 million and US$625 million)2 James Hardie’s guidance is based on current estimates and assumptions and is subj
Slide 23: Full Year Fiscal Year 2023 Guidance
James Hardie Q3 FY22 Results FULL YEAR FISCAL YEAR 2023 GUIDANCE Management announces full year FY23 Adjusted Net Income1 guidance, a range of: US$740 million and US$820 million an 18-31% increase from FY22 guidance midpoint North America Guidance – Full Year FY23 Net Sales Growth 16-20% growth vers
Slide 24: Highlights
James Hardie Q3 FY22 Results HIGHLIGHTS Strategic Execution Financial Highlights Marketing to the Global High Value Strong Results AICF Funding Homeowner Innovation Product Mix and Guidance Update FY21 FY22 YTD FY23 Proj. Future State FY23 Annual Key Brand Hardie™ Architectural Drive Long-Term FY23
Slide 25: Questions
QUESTIONS
Slide 26: Appendix
APPENDIX
Slide 27: Building Sustainable Communities: ESG
James Hardie Q3 FY22 Results BUILDING SUSTAINABLE COMMUNITIES: ENVIRONMENTAL, SOCIAL AND GOVERNANCE Communities Environment Reduction1 in Scope 1 and Scope 2 98% of employees hired locally 40% greenhouse gas intensity by 2030 of raw materials sourced within 100 83% miles of manufacturing facilities
Slide 28: Driving a Higher Value Product Mix – Average Net Sales Price
James Hardie Q3 FY22 Results DRIVING A HIGHER VALUE PRODUCT MIX – AVERAGE NET SALES PRICE North America Europe Average Net Sales Price Average Net Sales Price 850 824 350 343 807 340 800 774 340 328 € per MSF 330 US$ per MSF 745 750 725 320 718 312 311 698 306 700 310 300 650 290 280 600 FY19 FY20 F
Slide 29: Example Calculations – June 2020
James Hardie Q3 FY22 Results EXAMPLE CALCULATIONS – 24 JUNE 2020 PERCENT OF CASH FLOW CAP CALCULATION TOP UP CALCULATION Operating FY20 Free Cashflow Cash Flow US$ 438.0 A AICF Net Assets at 31 March 2020 A$ 90.8 C AUD/USD foreign exchange rate D B FY21 - claims paid estimate A$ 166.0 at 24 June 202
Slide 30: General Corporate Costs and Research & Development
James Hardie Q3 FY22 Results GENERAL CORPORATE COSTS RESEARCH & DEVELOPMENT Research and Development (30) (25.2) (25) US$ Millions (20.3) (20) Q3 9 Months (15) (10) (7.9) (8.5) (5) 0 FY21 FY22 • Investment in global growth initiatives • Customer Driven Innovation remains a including talent and expen
Slide 31: Operating Cash Flow and Capital Expenditures
James Hardie Q3 FY22 Results OPERATING CASH FLOW CAPITAL EXPENDITURES 200 Operating Cash Flow US$ Millions 800 174.5 678.4 180 700 160 600 553.3 140 69.7 US$ Millions 1 500 120 393.4 100 400 77.0 309.3 80 276.1 300 23.3 60 200 104.8 40 100 20 53.7 0 0 9 Mths FY18 9 Mths FY19 9 Mths FY20 9 Mths FY21
Slide 32: Liquidity Profile
James Hardie Q3 FY22 Results LIQUIDITY PROFILE Corporate debt structure • €400 million (US$452 million)2 3.625% senior unsecured notes, maturing 2026 (callable in October 2021) • US$400 million 5.00% senior unsecured notes maturing 2028 (callable in January 2023) 2 • US$600 million unsecured RCF, ma
Slide 33: Capital Allocation Aligned to Profitable Growth Strategy
James Hardie Q3 FY22 Results CAPITAL ALLOCATION ALIGNED TO PROFITABLE GROWTH STRATEGY • Preserve strong liquidity and flexibility • Invest in organic growth: capacity expansion, market driven innovation & marketing directly to the homeowner • Maintain net leverage ratio of 1-2x • 0.8x leverage ratio
Slide 34: Depreciation and Amortization
James Hardie Q3 FY22 Results DEPRECIATION AND AMORTIZATION Page 34
Slide 35: Asbestos Claims Data
James Hardie Q3 FY22 Results ASBESTOS CLAIMS DATA 9 Months ended 31 December 2021: • Net cash outflow was 1% above actuarial expectations • Gross cash outflow was 4% above actuarial expectations • Claims received were 10% below actuarial estimates and 9% below pcp • Number of claims settled were 2%
Slide 36: Non-GAAP Financial Measures
James Hardie Q3 FY22 Results NON-GAAP FINANCIAL MEASURES This Management Presentation forms part of a package of information about the company’s results. It should be read in conjunction with the other parts of this package, including the Management’s Analysis of Results, Media Release and Condensed
Slide 37: Non-GAAP Financial Measures
James Hardie Q3 FY22 Results NON-GAAP FINANCIAL MEASURES Adjusted EBIT and Adjusted EBITDA US$ Millions Three Months and Nine Months Ended 31 December 9 Months 9 Months Q3'22 Q3'21 FY22 FY21 EBIT $ 202.2 $ 131.8 $ 600.2 $ 328.1 Asbestos: Asbestos adjustments loss (gain) 1.6 35.8 (10.8) 115.8 AICF SG
Slide 38: Non-GAAP Financial Measures
James Hardie Q3 FY22 Results NON-GAAP FINANCIAL MEASURES Asia Pacific Fiber Cement Segment Adjusted EBIT and Adjusted EBITDA US$ Millions Three Months and Nine Months Ended 31 December 9 Months 9 Months Q3'22 Q3'21 FY22 FY21 Asia Pacific Fiber Cement Segment EBIT $ 39.1 $ 33.5 $ 122.4 $ 91.1 Restruc
Slide 39: Non-GAAP Financial Measures
James Hardie Q3 FY22 Results NON-GAAP FINANCIAL MEASURES Adjusted interest expense, net US$ Millions Three Months and Nine Months Ended 31 December 9 Months 9 Months Q3'22 Q3'21 FY22 FY21 Interest expense, net $ 10.6 $ 13.6 $ 30.8 $ 38.9 AICF interest income, net (0.2) (0.1) (0.5) (0.3) Adjusted int
Slide 40: Non-GAAP Financial Measures
James Hardie Q3 FY22 Results NON-GAAP FINANCIAL MEASURES Adjusted effective tax rate US$ Millions Three Months and Nine Months Ended 31 December 9 Months 9 Months Q3 FY22 Q3 FY21 FY22 FY21 Income before income taxes $ 191.6 $ 118.2 $ 569.3 $ 289.2 Asbestos: Asbestos adjustments loss (gain) 1.6 35.8
Slide 41: Q3 FY22 Management Presentation
Q3 FY22 MANAGEMENT PRESENTATION 7 February 2022
James Hardie Industries — Q3 FY2022 Earnings Presentation on 6ix