James Hardie Industries Plc. · NYSE:JHX
James Hardie Industries — Q4 FY2021 Earnings Presentation
42 slides from James Hardie Industries's earnings presentation, May 18, 2021
Slide 1: Q4 FY21 Management Presentation
Q4 FY21 MANAGEMENT PRESENTATION 18 May 2021
Slide 2: Cautionary Note on Forward-Looking Statements
James Hardie Q4 FY21 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 Q4 FY21 Results AGENDA • Business Highlights • Q4 and Full Year FY21 Dr. Jack Truong Chief Executive Officer Financial Results • Investor Day Preview • Questions and Answers Jason Miele Chief Financial Officer Page 3
Slide 4: Business Highlights
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Slide 5: FY15-FY19 Financial Results: Profitable Growth Stalled
James Hardie Q4 FY21 Results FY15-FY19 FINANCIAL RESULTS…PROFITABLE GROWTH STALLED Net Sales Adjusted EBIT US$ in millions US$ in millions 2,507 2,055 1,922 1,728 398 405 1,657 351 354 304 4 Year 4 Year CAGR: CAGR: +7%1 +7%1 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 1. CAGR calculation exclu
Slide 6: A New James Hardie: Executing Global Growth Strategy
James Hardie Q4 FY21 Results A NEW JAMES HARDIE: EXECUTING GLOBAL GROWTH STRATEGY FY20-FY21: Transform to Enable Measureable Accomplishments Consistent, Profitable Growth Globally and Record Performance World class manufacturing via LEAN to expand US$107.4 million in cumulative global LEAN savin
Slide 7: A New James Hardie: Step Change in Delivering Consistent Financial Results
James Hardie Q4 FY21 Results A NEW JAMES HARDIE: STEP CHANGE IN DELIVERING CONSISTENT FINANCIAL RESULTS, GLOBALLY Net Sales Adjusted EBIT US$ in millions 2,909 US$ in millions 629 2,607 2,507 487 398 405 2,055 351 354 1,922 304 1,657 1,728 2 Year 2Year CAGR: CAGR: +8% +25% FY15 FY16 FY17 FY18 FY19 F
Slide 8: A New James Hardie: Profitable Growth in an Expanding Global Footprint
James Hardie Q4 FY21 Results A NEW JAMES HARDIE: PROFITABLE GROWTH IN AN EXPANDING GLOBAL FOOTPRINT Net Sales1 US$ in millions 2,908.7 2,492.0 410.3 1,905.2 368.3 458.2 41.2 446.8 370.6 2,040.2 1,493.4 1,676.9 FY17 FY19 FY21 Adjusted EBIT2 758.9 US$ in millions 42.7 497.7 128.2 439.0 10.0 1.3 99.8 9
Slide 9: A New James Hardie: FY2022-FY2024 Targets
James Hardie Q4 FY21 Results A NEW JAMES HARDIE: FY2022 - FY2024 TARGETS FY 2022-24 3 Prior Targets Targets 25 to 30% 1 NA Adjusted EBIT Margin 20 to 25% 25 to 30% 1 APAC Adjusted EBIT Margin 20 to 25% 11 to 16% 2 Europe Adjusted EBIT Margin 10% United Kingdom NSW, Australia 1 Historical long-term A
Slide 10: 8th Straight Quarter of Delivering on Results
James Hardie Q4 FY21 Results A NEW JAMES HARDIE: 8th STRAIGHT QUARTER OF DELIVERING ON RESULTS… All Three Regions Delivered Double Global Net Sales Digit Growth in Both Net Sales and EBIT US$807.0 million North America Net Sales US$555.3 million +17% +20% EBIT US$152.9 million +27% Adjusted EBIT Mar
Slide 11: Q4 and Full Year FY21 Financial Results
Q4 AND FULL YEAR FY21 FINANCIAL RESULTS
Slide 12: Global Results
James Hardie Q4 FY21 Results GLOBAL RESULTS Q4 FY21 FY21 • All 3 regions delivered strong profitable growth 1,120.8 mmsf 4,131.4 mmsf Sales Volume • Adjusted EBIT increased 43% for the quarter, driven by: 11% 8% ◦ North America increased US$32.9 million (+27%) US$807.0 M US$2,908.7 M ◦ Europe increa
Slide 13: North America Summary
James Hardie Q4 FY21 Results NORTH AMERICA SUMMARY Q4 FY21 FY21 • Exteriors volume increased +12% for the quarter and +11% for the full year 723.2 mmsf 2,713.4 mmsf Sales Volume ◦ Accelerated share gain through customer engagement 10% 9% and integration ◦ Growth in FY20 was +9% US$555.3 M US$2,040.2
Slide 14: Europe Summary
James Hardie Q4 FY21 Results EUROPE SUMMARY Q4 FY21 FY21 • Record Net Sales of €104.6M, increased 12% for the quarter: 252.6 mmsf 876.0 mmsf ◦ Fiber Cement Net Sales €: +24% for the quarter Sales Volume 9% 6% ◦ Fiber Gypsum Net Sales €: +11% for the quarter ◦ Driven by double digit Net Sales growth
Slide 15: APAC Summary
James Hardie Q4 FY21 Results APAC SUMMARY • Continued market share gain in Australia and New Zealand Q4 FY21 FY21 ◦ Price Mix increased in Australia and New Zealand 145.0 mmsf 542.0 mmsf Sales Volume 16% 2% • Q4 adjusted EBIT +46% at 26.9% EBIT Margin driven by strong +16% volume growth A$162.6 M A$
Slide 16: Operating Cash Flow Up, Capital Expenditures Down
James Hardie Q4 FY21 Results OPERATING CASH FLOW UP CAPITAL EXPENDITURES DOWN 900 250 CAPEX Spend Operating Cash Flow US$ Millions 786.9 800 200 700 US$ Millions 600 150 87.2 1 500 451.2 100 382.5 39.4 400 308.5 304.0 50 106.6 300 71.3 200 0 FY20 FY21 100 Maintenance & Other Capacity - FY17 FY18 FY1
Slide 17: Liquidity Profile
James Hardie Q4 FY21 Results LIQUIDITY PROFILE Corporate debt structure • On 15 January 2021 redeemed US$400 million 4.75% senior unsecured notes maturing 2025 - US$9.5 million call premium and US$3.6 million in unamortized financing costs were recorded in Q4 FY21 • €400 million (US$468 million)2 3.
Slide 18: Capital Allocation Aligned to Strategy
James Hardie Q4 FY21 Results CAPITAL ALLOCATION ALIGNED TO STRATEGY Past 3 Year Capital Allocation Going Forward Cumulative FY2019-FY2021* • Preserve strong liquidity and flexibility Growth Capex • Invest in organic growth: capacity ~US$622 Million expansion & market driven innovation Debt Paydown •
Slide 19: Full Year Fiscal Year 2022 Guidance
James Hardie Q4 FY21 Results FULL YEAR FISCAL YEAR 2022 GUIDANCE FY 2021 FY 2022 Adjusted Net Income1,2 $458 million $520 to $570 million +14% to +24% vs pcp Ohio, USA PNW, USA 1 Fiscal Year 2021 Adjusted Net Income excludes asbestos related expenses and adjustments, and restructuring expenses 2 Adj
Slide 20: Annual Investor Day Preview
ANNUAL INVESTOR DAY PREVIEW
Slide 21: A New James Hardie
James Hardie Q4 FY21 Results A NEW JAMES HARDIE World-class Manufacturing via LEAN Resulting in Margin Expansion FY20-FY21: Leveraging Consumer Insights to Keep Product Portfolio Ahead of Market TRANSFORM TO ENABLE CONSISTENT Integrating Supply Chain with Customers to Optimize Working Capital PROFIT
Slide 22: Profitable Organic Growth Through Marketing to Homeowners
James Hardie Q4 FY21 Results PROFITABLE ORGANIC GROWTH THROUGH MARKETING TO HOMEOWNERS Campaign Started on May 3rd, 2021 It’s possible with AWARENESS AMPLIFICATION PURCHASE CONSIDERATION Homeowneris at the center of our attention Targeted Digital Media DRTV Influencer Content Creation Create Demand
Slide 23: Profitable Organic Growth Through Global Innovation
James Hardie Q4 FY21 Results PROFITABLE ORGANIC GROWTH THROUGH GLOBAL INNOVATION United Kingdom © This Land™ LTD 2021 New Jersey, USA California, USA Australia Market Driven Innovation Expands Opportunities for Future Organic Growth Page 23
Slide 24: James Hardie to Host Virtual Investor Day
James Hardie Q4 FY21 Results JAMES HARDIE TO HOST VIRTUAL INVESTOR DAY Single session: Tuesday May 25th, 7:00AM-9:15AM (Sydney, Australia Time) Monday May 24th, 5:00PM-7:15PM (New York City, USA Time) The session will be recorded and available on our Investor Relations website Registration
Slide 25: Questions
QUESTIONS
Slide 26: Appendix
APPENDIX
Slide 27: General Corporate Costs; Research & Development
James Hardie Q4 FY21 Results GENERAL CORPORATE COSTS RESEARCH & DEVELOPMENT • Stock compensation expense increased • Customer Driven Innovation remains US$15.0 million in Q4 and US$26.6 core strategic pillar million for the full year • R&D up 7% for the full year • Increase in stock compensation exp
Slide 28: Depreciation and Amortization
James Hardie Q4 FY21 Results DEPRECIATION AND AMORTIZATION US$ Millions Three Months and Full Year Ended 31 March Q4 FY21 Q4 FY20 FY21 FY20 Depreciation and amortization North America Fiber Cement $ 24.4 $ 22.7 $ 89.1 $ 88.7 Asia Pacific Fiber Cement 4.9 3.3 13.9 12.7 Europe Building Products 7.9 10
Slide 29: Asbestos Compensation
James Hardie Q4 FY21 Results ASBESTOS COMPENSATION KEY POINTS • Updated actuarial report completed as at 31 March 2021 ◦ Undiscounted and uninflated estimate decreased to A$1,352 million from A$1,452 million • For fiscal year 2021, we noted the following related to asbestos-related claims experience
Slide 30: Asbestos Claims Data
James Hardie Q4 FY21 Results ASBESTOS CLAIMS DATA Full Year ended 31 March 2021: • Net cash outflow was 13% below actuarial expectations • Gross cash outflow was 10% below actuarial expectations • Claims received were 13% below actuarial estimates and 17% below pcp • Number of claims settled were 8%
Slide 31: Net Post-Tax Unfunded Asbestos Liability
James Hardie Q4 FY21 Results NET POST-TAX UNFUNDED ASBESTOS LIABILITY A$ millions (except where stated) FY21 FY20 Central Estimate - Undiscounted and Uninflated $ 1,351.9 $ 1,452.4 Provision for claims handling costs of AICF 27.2 26.8 Cross claims and other 50.0 47.5 Net assets of AICF (170.3) (90.7
Slide 32: Asbestos Cash Movements for Full Year
James Hardie Q4 FY21 Results ASBESTOS CASH MOVEMENTS FOR FULL YEAR A$ millions AICF cash and investments - 31 March 2020 $ 93.9 Contributions to AFFA by James Hardie 220.9 Insurance recoveries 7.9 Interest income, net 0.1 Claims paid (146.5) Operating costs (3.2) AICF cash and investments - 31 March
Slide 33: Non-GAAP Financial Measures and Terms
James Hardie Q4 FY21 Results NON-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 and
Slide 34: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Financial Measures – GAAP equivalents This document contains financial statement line item descriptions that are considered to be non-GAAP, but are consistent with those used by Australian companies. Because the company prepares its Consolidat
Slide 35: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Financial Measures – GAAP equivalents Adjusted EBIT US$ Millions Three Months and Full Year Ended 31 March Q4'21 Q4'20 FY21 FY20 EBIT $ 144.7 $ (30.8) $ 472.8 $ 342.5 Asbestos: Asbestos adjustments 28.1 67.0 143.9 58.2 AICF SG&A expenses 0.3 0
Slide 36: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Asia Pacific Fiber Cement Segment Adjusted EBIT US$ Millions Three Months and Full Year Ended 31 March Q4'21 Q4'20 FY21 FY20 Asia Pacific Fiber Cement Segment EBIT $ 33.7 $ (16.7) $ 124.8 $ 58.5 Restructuring expenses - 36.3 3.4 36.3 Asia Paci
Slide 37: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Adjusted interest, net US$ Millions Three Months and Full Year Ended 31 March Q4'21 Q4'20 FY21 FY20 Interest, net $ (8.9) $ (13.3) $ (47.8) $ (54.4) AICF interest income, net 0.2 0.5 0.5 1.4 Adjusted interest, net $ (9.1) $ (13.8) $ (48.3) $ (
Slide 38: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Adjusted effective tax rate US$ Millions Three Months and Full Year Ended 31 March Q4 FY21 Q4 FY20 FY21 FY20 Operating profit before income taxes $ 122.8 $ (44.1) $ 412.0 $ 288.0 Asbestos: Asbestos adjustments 28.1 67.0 143.9 58.2 AICF SG&A ex
Slide 39: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES US$ Millions Full Year Ended 31 March FY21 FY20 FY19 FY18 FY17 FY16 FY15 EBIT $ 472.8 $ 342.5 $ 351.6 $ 229.2 $ 393.2 $ 354.0 $ 335.0 Asbestos: Asbestos adjustments 143.9 58.2 22.0 156.4 (40.4) (5.5) (33.4) AICF SG&A expenses 1.2 1.7 1.5 1.9 1
Slide 40: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Asia Pacific Fiber Cement Segment Adjusted EBIT US$ Millions Full Year Ended 31 March FY21 FY19 FY17 Asia Pacific Fiber Cement Segment EBIT $ 124.8 $ 99.8 $ 93.8 Restructuring expenses 3.4 - - Asia Pacific Fiber Cement Segment Adjusted EBIT $
Slide 41: Non-GAAP Financial Measures
James Hardie Q4 FY21 Results NON-GAAP FINANCIAL MEASURES Adjusted net income US$ Millions Full Year Ended 31 March FY21 FY20 FY19 FY18 FY17 FY16 FY15 Net income $ 262.8 $ 241.5 $ 228.8 $ 146.1 $ 276.5 $ 244.4 $ 291.3 Asbestos: Asbestos adjustments 143.9 58.2 22.0 156.4 (40.4) (5.5) (33.4) AICF SG&A
Slide 42: Q4 FY21 Management Presentation
Q4 FY21 MANAGEMENT PRESENTATION 18 May 2021
James Hardie Industries — Q4 FY2021 Earnings Presentation on 6ix