Exhibit 99.1
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Exhibit 99.1
INVESTOR PRESENTATION
JANUARY 2016
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DISCLAIMER
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 Securities and Exchange Commission, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and other written materials and in oral statements made by the companys officers, directors or employees to analysts, institutional investors, existing and potential lenders, representatives of the media and others. Statements that are not historical facts are forward-looking statements and such forward-looking statements are statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements include:
statements about the companys future performance;
projections of the companys results of operations or financial condition;
statements regarding the companys plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products;
expectations concerning the costs associated with the suspension or closure of operations at any of the companys plants and future plans with respect to any such plants;
expectations concerning the costs associated with the significant capital expenditure projects at any of the companys plants and future plans with respect to any such projects;
expectations regarding the extension or renewal of the companys credit facilities including changes to terms, covenants or ratios;
expectations concerning dividend payments and share buy-backs;
statements concerning the companys corporate and tax domiciles and structures and potential changes to them, including potential tax charges;
statements regarding tax liabilities and related audits, reviews and proceedings;
expectations about the timing and amount of contributions to Asbestos Injuries Compensation Fund (AICF), a special purpose fund for the compensation of proven Australian
asbestos-related personal injury and death claims;
expectations concerning indemnification obligations;
expectations concerning the adequacy of the companys warranty provisions and estimates for future warranty-related costs;
statements regarding the companys ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and
competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third-party recoveries; and
statements about economic conditions, such as changes in the US economic or housing recovery or changes in the market conditions in the Asia Pacific region, the levels of
new home construction and home renovations, unemployment levels, changes in consumer income, changes or stability in housing values, the availability of mortgages and
other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates, and builder and
consumer confidence.
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DISCLAIMER (continued)
Words such as believe, anticipate, plan, expect, intend, target, estimate, project, predict, forecast, guideline, aim, will, should, likely, continue, may, objective, outlook and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward-looking statements and all such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.
Forward-looking statements are based on the companys current expectations, estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the companys control. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements. These factors, some of which are discussed under Risk Factors in Section 3 of the Form 20-F filed with the Securities and Exchange Commission on 21 May 2015, include, but are not limited to: all matters relating to or arising out of the prior manufacture of products that contained asbestos by current and former company subsidiaries; required contributions to AICF, any shortfall in AICF and the effect of currency exchange rate movements on the amount recorded in the companys financial statements as an asbestos liability; governmental loan facility to AICF; compliance with and changes in tax laws and treatments; competition and product pricing in the markets in which the company operates; the consequences of product failures or defects; exposure to environmental, asbestos, putative consumer class action or other legal proceedings; general economic and market conditions; the supply and cost of raw materials; possible increases in competition and the potential that competitors could copy the companys products; reliance on a small number of customers; a customers inability to pay; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; the effect of the transfer of the companys corporate domicile from the Netherlands to Ireland, including changes in corporate governance and any potential tax benefits related thereto; currency exchange risks; dependence on customer preference and the concentration of the companys customer base on large format retail customers, distributors and dealers; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; possible inability to renew credit facilities on terms favorable to the company, or at all; acquisition or sale of businesses and business segments; changes in the companys key management personnel; inherent limitations on internal controls; use of accounting estimates; and all other risks identified in the companys reports filed with Australian, Irish and US securities regulatory agencies and exchanges (as appropriate). The company cautions you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially from those referenced in the companys forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the companys current expectations concerning future results, events and conditions. The company assumes no obligation to update any forward-looking statements or information except as required by law.
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AGENDA
Global Strategy and Business Overview
USA & Europe Fiber Cement
Asia Pacific Fiber Cement
Capital Management Framework
Guidance
Appendix
In this Investor Presentation, the company may present financial measures, sales volume terms, financial ratios, and Non-US GAAP financial measures included in the Definitions and other terms section of this document. The company presents financial measures that it believes are customarily used by its Australian investors. Specifically, these financial measures, which are equivalent to or derived from certain US GAAP measures as explained in the definitions, include EBIT, EBIT margin, Operating profit before income taxes and Net operating profit. The company may also present other terms for measuring its sales volume (million square feet or mmsf and thousand square feet or msf); financial ratios (Gearing ratio, Net interest expense cover, Net interest paid cover, Net debt payback, Net debt (cash)); and Non-US GAAP financial measures (Adjusted EBIT, Adjusted EBIT margin, Adjusted net operating profit, Adjusted diluted earnings per share, Adjusted operating profit before income taxes, Adjusted effective tax rate on earnings, Adjusted EBITDA, and Adjusted selling, general and administrative expenses. Unless otherwise stated, results and comparisons are of the second quarter of the current fiscal year versus the second quarter of the prior fiscal year
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GLOBAL STRATEGY
Industry Leadership and Profitable Growth
Introduce differentiated products to deliver a sustainable competitive advantage
Aggressively grow demand for our products in targeted market segments
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A GROWTH FOCUSED COMPANY
Annual net sales US$1.8b
Total assets US$1.9b
Strong cash generation
Operations in North America, Asia Pacific and Europe
3,178 employees
Market cap US$5.08b (approx)
S&P/ASX 100 company
NYSE ADR listing
Market capitalization as at 11 December 2015. Total assets as at 30 September 2015 and employees as at 31 March 2015. Annual net sales for six months to
30 September 2015 annualised. Total assets exclude asbestos compensation.
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GROUP OVERVIEW 2nd QUARTER & HALF YEAR FY16 RESULTS
Adjusted Net Operating Profit
2nd Qtr Half Year
US$65.3M Flat US$128.8M 12%
Adjusted EBIT
2nd Qtr Half Year
US$95.3M 12% US$185.0M 18%
Adjusted EBIT Margin %
2nd Qtr Half Year
21.2% 1.9 pts 21.1% 2.9 pts
Adjusted Diluted EPS
2nd Qtr Half Year
US15cents Flat US29cents 12%
Net Operating Cash Flow
Half Year
US$85.5M 151%
Dividends declared per share. Excludes Australian Pipes business which was sold in Q1 FY16
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KEY THEMES 2ND QUARTER & HALF YEAR FY16 RESULTS
Higher volumes in all businesses, but PDG in our US business tracked below our target level
Higher average net sales prices in local currencies
Improved plant performance trend sustained
Half year USA and Europe Fiber Cement segment EBIT margin of 25.6% above our target range of 20% to
25%
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WORLD LEADER IN FIBER CEMENT
Employees¹
2,269 in USA and Europe
909 in Asia Pacific
USA & Europe
Asia Pacific
Research & Development
Manufacturing FacilitiesGeographic Mix¹
Net Sales
Asia Pacific 20%
USA and Europe 80%
EBIT ²
Asia Pacific 19%
USA and Europe 81%
1 All percentages are as at 30 September 2015 and numbers are for the full year ended 31 March 2015
² EBIT excludes research and development, asbestos-related expenses and adjustments and New Zealand weathertightness claims
KEY
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CREATING A SUSTAINABLE AND DIFFERENTIATED ADVANTAGE
Research & Development: Significant and consistent investment
US$31.7m spent on Research & Development in FY15 US$394.8m spent on Research & Development since 2000
James Hardie
Siding Products
History of Fiber Cement Substrate Development
7th ENGNEERED FOR CLIMATETM HardieZoneTM
6th MODIFIED THICKNESS TECHNOLOGY
5TH COLORPLUS TECHNOLOGY
4TH SURFACE ADHESION TECHNOLOGY
3RD SUBSTRATE COMPOSITION
2ND PRIMER ADDED
1ST FIBER-CEMENT SUBSTRATE THE JAMES HARDIE INNOVATION PATH Product Generations generic Fiber-CementPAGE 10
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DRIVING CATEGORY AND MARKET SHARE GAINS
North America External Cladding Share¹
7%
7% 18% 7%
12%
28%
21%
Fiber Cement Vinyl
Wood (including engineered wood) Stucco Brick Stone Other (aluminium etc)
35/90 Plan
Grow fiber cement share to 35% of the exterior cladding market against other wood-looking siding alternatives Maintain JHXs category share at 90%
Currently:
JHX wins ~90% of the fiber cement category, while fiber cement used in ~18% of the total market Current estimate is wood-look siding (Wood, Vinyl and Fiber Cement) is 65-70% of total market.
¹Source: Internal estimates based on NAHB product usage data adjusted for regional market intelligence
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DELIVERING SUPERIOR PRODUCT PERFORMANCE
Fiber cement is more durable than wood and engineered wood, looks and performs better than vinyl, and is more cost effective and quicker to build with than brick
Fiber Cement Vinyl Engineered Wood
Fire resistant
Hail resistant
Resists warping
Resists buckling
Lasting color
Dimensional stability
Can be repainted
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BUILDING A PORTFOLIO OF PRODUCTS AND BRANDS
Primary Products
Trim / Commercial Interior Walls / Soffit Backerboard Siding Flooring Fascia Exteriors Ceilings
U.S. & Europe
Asia Pacific
Brand Portfolio
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USA AND EUROPE FIBER CEMENT SEGMENT
USA Plant Locations
Tacoma, WA
Reno, NV Peru, IL
Pulaski, VA Fontana, CA Summerville, Waxahachie, SC
TX Cleburne, TX
Plant City, FL
Largest fiber cement producer in North America
2,269 employees
9 manufacturing plants¹
2 research and development facilities
HY FY16 HY FY15
Net Sales US$698.9m US$656.9m
EBIT US$178.9m US$142.8m
EBIT Margin 25.6% 21.7%
(US$)
¹ Production was suspended at the Summerville plant in November 2008
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AGGRESSIVELY GROWING DEMAND FOR OUR PRODUCTS
USA Fiber Cement
Top Line Growth1
3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
$ 1,300
$ 1,200
$ 1,100
$ 1,000
$ 900
$ 800
$ 700
$ 600
$ 500
$ 400
$ 300
$ 200
$ 100
$ 0
05 06 07 08 09 10 11 12 13 14 15 Revenue (US$M) JH Volume (mmsf), Starts (000s Units) 1Rolling 12 month average of seasonally adjusted estimate of housing starts by US Census Bureau
JH Volume Housing Starts JH Revenue
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ACHIEVING THE RIGHT VALUE FOR OUR PRODUCTS
USA and Europe Fiber Cement
710 Average Net Sales Price
685 675
670 652 648 642 632 626
630
590
550
FY10 FY11 FY12 FY13 FY14 FY15 1H16
Impact of price increases offset by US currency appreciation in 1H16
PAGE 16
US$ per MSF
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USA AND EUROPE: DELIVERING STRONG RETURNS
Quarterly EBIT and EBIT Margin1
30 25 20 15 10 5 0
EBIT Margin
100 90 80 70 60 50 40 30 20 10 0
EBIT US$M
FY11 FY12 FY13 FY14 FY15 FY16 EBIT EBIT/Sales
We expect EBIT margins for fiscal year 2016 to be towards the higher end of, and may exceed our stated target range of 20% to 25%
1 Excludes asset impairment charges of US$14.3 million in 4th quarter FY12, US$5.8 million in 3rd quarter FY13 and US$11.1 million in 4th quarter FY13
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ASIA PACIFIC FIBER CEMENT SEGMENT
Asia Pacific Plant Locations
909 employees
5 manufacturing plants across Australia, New Zealand and the Philippines
1 research and development facility
HY FY16 HY FY15
Net Sales A$239.0m A$215.6m
EBIT A$55.3m A$48.9m
EBIT Margin (A$) 23.2% 23.1%
Manila Brisbane Sydney AucklandEBIT and EBIT margin excludes New Zealand weathertightness claims
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ASIA PACIFIC: DELIVERING STRONG RETURNS
Asia Pacific Fiber Cement Segment
Average Net Sales Price Quarterly EBIT and EBIT Margin1
1020 1000 980 960 940 920 900 880 860 840 820
A$1,006
FY10 FY11 FY12 FY13 FY14 FY15 1H16
EBIT US$m
30 25 20 15 10 5 0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
EBIT EBIT Margin
EBIT Margin
30 25 20 15 10 5 0
1 EBIT and EBIT margin excludes New Zealand weathertightness claims
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TARGETING THE RIGHT PRODUCT INTO THE RIGHT MARKET
Asia Pacific Core Markets
Ceilings and partitions Philippines Interior walls New Zealand
Exterior cladding
Australia
General purpose flooring
Australia
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FINANCIAL MANAGEMENT SUPPORTING GROWTH
1
Strong Financial
Management
Strong margins and operating
cash flows
Strong governance and
transparency
Investment-grade financial
management
2 Disciplined Capital
Allocation
Investing in R&D and capacity
expansion to support organic
growth
Maintain ordinary dividends within
the defined payout ratio
Flexibility for:
Accretive and strategic
inorganic opportunities
Withstand market cycles
Consider further
shareholder returns when
appropriate
3 Liquidity and
Funding
Conservative leveraging of balance
sheet within 1-2 times adjusted
EBITDA target
Closure of $500 million
unsecured revolving credit
facility announced on 11
December 2015, which
replaced existing bilateral
loan facilities of $590 million
5 year maturity of bank
facilities
38% liquidity at Q2 FY16
(based on $500m syndicated
facilities)
Financial management consistent with investment grade credit. Ability to withstand market cycles and other unanticipated events.
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FY2016 GUIDANCE
Management expects full year Adjusted net operating profit to be between US$230 million and
US$250 million assuming, among other things, housing conditions in the United States continue to improve in line with our assumed forecast of new construction starts between 1.1 and 1.2 million, input prices remaining stable and an average USD/AUD exchange rate that is at or near current levels for the remainder of the year
Management cautions that although US housing activity has been improving, market conditions remain somewhat uncertain and some input costs remain volatile. Management is unable to forecast the comparable US GAAP financial measure due to uncertainty regarding the impact of actuarial estimates on asbestos-related assets and liabilities in future periods
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APPENDIX
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U.S. MARKETPLACE
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AUSTRALIA & NEW ZEALAND MARKETPLACE
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FINANCIAL SUMMARY
Three Months and Half Year Ended 30 September
US$ Millions Q216 Q215 % Change 1H16 1H15 % Change
Net Sales
USA and Europe Fiber Cement $ 361.9 $ 335.4 8 $ 698.9 $ 656.9 6
Asia Pacific Fiber Cement 88.3 105.0 (16) 179.6 200.3 (10)
Total Net Sales $ 450.2 $ 440.4 2 $ 878.5 $ 857.2 2
EBITUS$ Millions
USA and Europe Fiber Cement $ 89.4 $ 74.8 20 $ 178.9 $ 142.8 25
Asia Pacific Fiber Cement1 22.0 25.7 (14) 41.7 46.4 (10)
Research & Development (6.0) (6.8) 12 (12.0) (13.6) 12
General Corporate2 (10.1) (8.6) (17) (23.6) (19.3) (22)
Adjusted EBIT $ 95.3 $ 85.1 12 $ 185.0 $ 156.3 18
Net interest expense excluding AICF interest income (6.5) (1.6) (12.5) (2.5)
Other (expense) income (0.6) 2.1 (3.7)
Adjusted income tax expense (22.9) (18.1) (27) (45.8) (34.6) (32)
Adjusted net operating profit $ 65.3 $ 65.4$ 128.8 $ 115.5 12
1 Asia Pacific Fiber Cement EBIT excludes New Zealand weathertightness claims
2 Excludes Asbestos related expenses and adjustments
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KEY RATIOS
Half Year Ended 30 September
1H16 1H15 1H14
EPS (Diluted)1 (US Cents) 29c 26c 24c
EBIT/ Sales (EBIT margin)2 21.1% 18.2% 18.3%
Gearing Ratio1 33.1% 21.5% (9.5)%
Net Interest Expense Cover2 14.8x 96.3x 66.8x
Net Interest Paid Cover2 15.5x 200.7x 77.9x
Net Debt Payback3 1.7yrs 1.1yrs
1 Excludes asbestos adjustments, AICF SG&A expenses, AICF interest income, New Zealand weathertightness claims and tax adjustments
2 Excludes asbestos adjustments, AICF SG&A expenses and New Zealand weathertightness claims
3 Excludes asbestos adjustments and changes in asbestos-related assets and liabilities
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USA AND EUROPE FIBER CEMENT 5 YEAR RESULTS OVERVIEW
FY11 FY12 FY13 FY14 FY15
Net Sales 814 862 951 1,128 1,277
US$m
Sales Volume 1,248 1,332 1,489 1,697 1,850
mmsf
Average Price 648 642 626 652 675
US$ per msf ²
EBIT US$m¹ 160 163 163 237 286
EBIT Margin %¹ 20 19 17 21 22
1Excludes asset impairment charges of US$14.3 million and US$16.9 million in FY12 and FY13, respectively
2During the second quarter of FY14, the company refined its methodology for calculating average net sales price in both the USA and Europe and Asia Pacific Fiber Cement
segments to exclude ancillary products that have no impact on fiber cement sales volume, which is measured and reported in mmsf. As the revenue contribution of these ancillary
products has been increasing, the company believes the refined methodology provides an improved disclosure of average net sales price, in line with the companys primary fibre
cement business, which is a key segment performance indicator. The company has restated average net sales price in the prior periods to conform with the current calculation of
average net sales price.
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ASIA PACIFIC FIBER CEMENT 5 YEAR RESULTS OVERVIEW
FY11 FY12 FY13 FY14 FY15
Net Sales 353 376 370 366 380
US$m
Sales Volume 408 392 394 417 456
mmsf
Average Price 906 906 901 930 942
A$ per msf1
EBIT US$m2 79 86 75 83 90
EBIT Margin %2 23 23 20 23 24
1During the second quarter of FY14, the company refined its methodology for calculating average net sales price in both the USA and Europe and Asia Pacific Fiber Cement
segments to exclude ancillary products that have no impact on fiber cement sales volume, which is measured and reported in mmsf. As the revenue contribution of these ancillary
products has been increasing, the company believes the refined methodology provides an improved disclosure of average net sales price, in line with the companys primary fiber
cement business, which is a key segment performance indicator. The company has restated average net sales price in the prior periods to conform with the current calculation of
average net sales price.
2Excludes New Zealand weathertightness claims of US$5.4 million , US$13.2 million , US$1.8 million and US$4.3 million in FY12, FY13, FY14 and FY15, respectively
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RESULTS HALF YEAR FY16
Half Year Ended 30 September
US$ Millions 1H16 1H15 % Change
Net sales 878.5 857.2 2
Gross profit 322.6 291.1 11
SG&A expenses (124.1) (120.7) (3)
EBIT 245.6 196.0 25
Net operating
profit 190.2 156.1 22
Adjusted EBIT 1 185.0 156.3 18
Adjusted net
operating profit 2 128.8 115.5 12
1 Excludes Asbestos related expenses and adjustments and NZWT claims
2 Excludes Asbestos related expenses and adjustments, NZWT claims, and tax adjustments
Net sales increased
Higher volume in both segments
Higher average net sales prices in local currencies
Gross profit margin increased 270 bps
Improved performance across our US plants
Lower input costs
SG&A expenses increased
Higher recognized FX losses
Higher stock compensation expenses
Investing in both segments, partially offset by FX
Adjusted net operating profit remained flat
25% EBIT growth
Increase in Adjusted income tax expense of US$11.2
million
Higher gross interest expense of US$10.8 million
US$5.8 million favorable movement in other income
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US INPUT COSTS
Quarterly US Input Costs
Pulp Prices
1,200 1,000 800 600 400 200 0
Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216
PULP GAS ELECTRIC CEMENT
10 9 8 7 6 5 4 3 2 1 0
Cement, Gas and Electric Prices
The price of NBSK pulp decreased by ~2% compared to pcp1
Cement prices are up 7-8% compared to pcp1
Gas prices down 20+% compared to pcp1
Electricity prices down slightly compared to pcp1
The information underlying the table above is sourced as follows:
Pulp Cost per ton from RISI
Cement Relative index from the Bureau of Labor Statistics
Gas Cost per thousand cubic feet for industrial users from US Energy Information Administration
Electric Cost per thousand kilowatt hour for industrial users from US Energy Information Administration
1 Prior corresponding period
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SEGMENT EBIT 2nd QUARTER and HALF YEAR FY16
USA and Europe Fiber Cement
200
178.9
150 142.8
126.7
100 89.4 Q2 EBIT
67.3 74.8 1H EBIT
50
0
FY14 FY15 FY16
Asia Pacific Fiber Cement1
60 55.4
49.9
50 45.3
40
30 27.7 30.0 Q2 EBIT
23.9 1H EBIT
20
10
0
FY14 FY15 FY16
A$ Millions US$ Millions
1 Excludes New Zealand weathertightness claims
2 Excludes Australian Pipes business which was sold in Q1 FY16
USA and Europe Fiber Cement EBIT summary
Quarter and 1H EBIT increased by 20% and 25%,
respectively when compared to pcp
Primarily driven by plant performance and lower input
costs
Asia Pacific Fiber Cement EBIT1 summary
EBIT in local currency for the quarter and 1H increased
8% and 11%, respectively when compared to pcp
Increase reflects higher volume2 and price, partially offset
by production costs
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SEGMENT EBIT 2nd QUARTER and HALF YEAR FY16
US$ Millions
US$ Millions
Research and Development
(15) (13.6)
(11.6) (12.0)
(10)
(6.8) (6.0)
(5.5) Q2 EBIT
(5)
1H EBIT
0
FY14 FY15 FY16
General Corporate Costs1
(25) (23.6)
(20) (18.1) (19.3)
(15)
(11.2) Q2 EBIT
(10) (8.6) (10.1) 1H EBIT
(5)
0
FY14 FY15 FY16
R&D summary
On strategy to invest between 2%-3% of sales
Fluctuations reflect normal variation and timing in
number of R&D projects in process in any given period
General corporate costs
Results for the quarter and 1H reflect higher:
Stock compensation expenses
Realized foreign exchange losses
1 Excludes Asbestos related expenses and adjustments and ASIC expenses
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CHANGES IN AUD vs. USD
AUD/USD Exchange Rate
1.00
0.95
0.90
0.85
0.80
0.75
0.70
0.65
0.60
30 Sep 13 31 Dec 13 31 Mar 14 30 Jun 14 30 Sep 14 31 Dec 14 31 Mar 15 30 Jun 15 30 Sep 15
As Reported Excluding Translation Impact1 Translation Impact2
US$ Millions 1H16 1H15 % Change 1H16 % Change 1H16 % Change
Net Sales 878.5 857.2 2 919.7 7 (41.2) (5)
Gross Profit 322.6 291.1 11 336.8 16 (14.2) (5)
Adjusted EBIT 185.0 156.3 18 193.6 24 (8.6) (6)
Adjusted net operating profit 128.8 115.5 12 133.8 16 (5.0) (4)
1 As Reported 1H16 figures using 1H15 weighted average exchange rate of 1.0763
2 Reflects the difference between 1H16 As Reported and 1H16 using 1H15 weighted exchange rate
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INCOME TAX
Three Months and Half Year Ended 30 September
Millions of US dollars Q216 Q215 1H16 1H15
Operating profit before taxes 153.9 144.7 235.2 190.3
Asbestos:
Asbestos adjustments1 (65.6) (63.5) (60.7) (41.2)
NZ weathertightness claims (0.1) 2.3 0.1 1.0
Adjusted net operating profit
before taxes 88.2 83.5 174.6 150.1
Adjusted income tax expense2 (22.9) (18.1) (45.8) (34.6)
Adjusted effective tax rate 26.0% 21.7% 26.2% 23.1%
Income tax expense (23.7) (17.5) (45.0) (34.2)
Income taxes paid 35.1 16.0
Income taxes payable 4.3 5.5
26.2% estimated adjusted effective tax rate
(ETR) for the year
Adjusted income tax expense and adjusted ETR
increased due to changes in geographical mix of
earnings
Income taxes are paid and payable in Ireland, the US,
Canada, New Zealand and the Philippines
Income taxes are not currently paid or payable in
Europe (excluding Ireland) or Australia due to tax
losses. Australian tax losses primarily result from
deductions relating to contributions to AICF
1 Includes Asbestos adjustments, AICF SG&A expenses and AICF interest expense, net 2 Excludes tax effects of Asbestos and other tax adjustments
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CASHFLOW
US$ Millions 1H16 1H15 1 Change (%)
Net Income 190.2 156.1
Adjustment for non-cash items (20.0) (4.4)
Annual AICF contribution (62.8) (113.0) 44
Operating working capital2 7.0 8.6 (19)
Other net operating activities (28.9) (13.2)
Cash Flow from Operations 85.5 34.1
Capital expenditures3 (33.8) (159.7) 79
Acquisition of assets (0.5)
Free Cash Flow 51.2 (125.6)
Dividends paid (206.8) (355.9) 42
Net proceeds from long-term debt 193.0 380.0 (49)
Share related activities (18.5) (6.3)
Free Cash Flow after Financing Activities 18.9 (107.8)
1 Certain prior year balances have been reclassified to conform to the current year presentation
2 Excludes AP related to capital expenditures
3 Includes capitalized interest and proceeds from sale of property, plant and equipment
4 Accounts receivable (AR) and Accounts payable (AP)
Net income increased US$34.1 million compared to
prior corresponding period
Increase in net operating cash flow
Lower contribution to AICF
Unfavorable change in working capital due to
unfavorable movements in AR4 and AP4,
partially offset by a favorable movement in
inventory
Lower capital expenditures
Completion of our Australian capital expansion
project, and near completion of our US capital
expansion projects
Lower financing activities
Decrease in proceeds drawn from our debt
facilities
Decrease in dividends paid
Increase in share buyback activity
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LIQUIDITY PROFILE
Debt Maturity Profile $500m $325m US$ millions
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 1 Callable from February 2018
2 Original issue discount (OID) US$2.4 million at 30 September 2015
Strong balance sheet:
US$500 million of bank facilities
US$325 million 8 year senior
unsecured notes1,2
US$507.0 million net debt as of 1H FY16
Net leverage of 1.24x at 1H FY16
Net Debt within target range of 1-2 times
EBITDA excluding asbestos
We remain in compliance with all debt
covenants
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ASBESTOS CLAIMS DATA
Three Months and Half Year Ended 30 September
Q216 Q215 Change % 1H16 1H15 Change %
Claims received 157 181 13 296 337 12
Actuarial estimate for the period 165 152 (9) 329 305 (8)
Difference in claims received to
actuarial estimate 8 (29) 33 (32)
Average claim settlement1 (A$) 213,000 270,000 21 223,000 244,000 9
Actuarial estimate for the period2 302,000 289,000 (4) 302,000 289,000 (4)
Difference in claims paid to
actuarial estimate 89,000 19,000 79,000 45,000 (76)
Claims received during the quarter and half year were 5% and 10% below actuarial estimates, respectively
Mesothelioma claims reported for the half year are 5% above non-seasonally adjusted expectations and are 3% below pcp
Average claim settlement for quarter and half year is lower by 29% and 26%, respectively, versus actuarial estimates
Average claim settlement sizes are generally lower across all disease types compared to actuarial estimates for FY16
Decrease in average claim settlement for the quarter and half year is due to lower number of large claims settled as compared to pcp
1 Average claim settlement is derived as the total amount paid divided by the number of non-nil claim settlements
2 This actuarial estimate is a function of the assumed experience by disease type and the relative mix of settlements assumed by disease type. Any variances in the assumed mix of settlements by disease type will have an impact on the average claim settlement experience
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DEFINITIONS AND OTHER TERMS
This Management Presentation forms part of a package of information about the companys results. It should be read in conjunction with the other parts of this package, including the Managements Analysis of Results, Media Release and Consolidated Financial Statements
Definitions
Non-financial Terms
AFFA Amended and Restated Final Funding Agreement
AICF Asbestos Injuries Compensation Fund Ltd
NBSK Northern Bleached Soft Kraft; the companys benchmark grade of pulp
Legacy New Zealand weathertightness claims (New Zealand weathertightness claims) Expenses arising from defending and resolving claims in New Zealand that allege poor building design, inadequate certification of plans, inadequate construction review and compliance certification and deficient work by sub-contractors
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DEFINITIONS AND OTHER TERMS
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 Consolidated Financial Statements under US GAAP, the following table cross-references each non-US GAAP line item description, as used in Managements Analysis of Results and Media Release, to the equivalent US GAAP financial statement line item description used in the companys Condensed Consolidated Financial Statements:
Managements Analysis of Results and Media Release
Net sales
Cost of goods sold Gross profit
Selling, general and administrative expenses Research and development expenses
Asbestos adjustments EBIT*
Net interest income (expense)*
Other income (expense)
Operating profit (loss) before income taxes*
Income tax (expense) benefit
Net operating profit (loss)*
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (US GAAP)
Net sales
Cost of goods sold Gross profit
Selling, general and administrative expenses Research and development expenses
Asbestos adjustments Operating income (loss)
Sum of interest expense and interest income
Other income (expenses)
Income (loss) before income taxes
Income tax (expense) benefit
Net income (loss)
*- Represents non-us GAAP descriptions used by Australian companies. PAGE 40
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DEFINITIONS AND OTHER TERMS
EBIT margin EBIT margin is defined as EBIT as a percentage of net sales
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) divided by net debt (cash) plus shareholders equity
Net interest expense cover EBIT divided by net interest expense (excluding loan establishment fees) Net interest paid cover EBIT divided by cash paid during the period for interest, net of amounts capitalized Net debt payback Net debt (cash) divided by cash flow from operations Net debt (cash) Short-term and long-term debt less cash and cash equivalents Return on capital employed EBIT divided by gross capital employed
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NON-US GAAP FINANCIAL MEASURES
Adjusted EBIT and Adjusted EBIT margin Adjusted EBIT and Adjusted EBIT margin are not measures of financial performance under
US GAAP and should not be considered to be more meaningful than EBIT and EBIT margin. Management has included these financial
measures to provide investors with an alternative method for assessing its operating results in a manner that is focused on the
performance of its ongoing operations and provides useful information regarding its financial condition and results of operations.
Management uses these non-US GAAP measures for the same purposes.
US$ Millions Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
EBIT $ 161.1 $ 145.6 $ 245.6 $ 196.0
Asbestos:
Asbestos adjustments (66.0) (63.5) (61.5) (42.0)
AICF SG&A expenses 0.3 0.7 0.8 1.3
New Zealand weathertightness claims (0.1) 2.3 0.1 1.0
Adjusted EBIT 95.3 85.1 185.0 156.3
Net sales $ 450.2 $ 440.4 $ 878.5 $ 857.2
Adjusted EBIT margin 21.2% 19.3% 21.1% 18.2%
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NON-US GAAP FINANCIAL MEASURES
Adjusted net operating profit Adjusted net operating profit is not a measure of financial performance under US GAAP and should not
be considered to be more meaningful than net operating profit. Management has included this financial measure to provide investors with
an alternative method for assessing its operating results in a manner that is focused on the performance of its ongoing operations.
Management uses this non-US GAAP measure for the same purposes.
US$ Millions Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
Net operating profit $ 130.2 $ 127.2 $ 190.2 $ 156.1
Asbestos:
Asbestos adjustments (66.0) (63.5) (61.5) (42.0)
AICF SG&A expenses 0.3 0.7 0.8 1.3
AICF interest expense (income), net 0.1 (0.7) (0.5)
New Zealand weathertightness claims (0.1) 2.3 0.1 1.0
Asbestos and other tax adjustments 0.8 (0.6) (0.8) (0.4)
Adjusted net operating profit $ 65.3 $ 65.4 $ 128.8 $ 115.5
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NON-US GAAP FINANCIAL MEASURES
Adjusted diluted earnings per share Adjusted diluted earnings per share is not a measure of financial performance under US GAAP
and should not be considered to be more meaningful than diluted earnings per share. Management has included this financial measure to
provide investors with an alternative method for assessing its operating results in a manner that is focused on the performance of its
ongoing operations. Management uses this non-US GAAP measure for the same purposes.
Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
Adjusted net operating profit $ 65.3 $ 65.4 $ 128.8 $ 115.5
(US$ millions)
Weighted average common shares 446.7 445.8 447.3 445.7
outstandingDiluted (millions)
Adjusted diluted earnings per share
(US cents) 15 15 29 26
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NON-US GAAP FINANCIAL MEASURES
Adjusted income tax expense and Adjusted effective tax rate Adjusted income tax expenses and Adjusted effective tax rate is not a
measure of financial performance under US GAAP and should not be considered to be more meaningful than income tax expense and
effective tax rate, respectively. Management has included these financial measures to provide investors with an alternative method for
assessing its operating results in a manner that is focused on the performance of its ongoing operations. Management uses these non-US
GAAP measures for the same purposes.
US$ Millions Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
Operating profit before income taxes $ 153.9 $ 144.7 $ 235.2 $ 190.3
Asbestos:
Asbestos adjustments (66.0) (63.5) (61.5) (42.0)
AICF SG&A expenses 0.3 0.7 0.8 1.3
AICF interest expense (income), net 0.1 (0.7) (0.5)
New Zealand weathertightness claims (0.1) 2.3 0.1 1.0
Adjusted operating profit before income
taxes $ 88.2 $ 83.5 $ 174.6 $ 150.1
Income tax expense $ (23.7) $ (17.5) $ (45.0) $ (34.2)
Asbestos and other tax adjustments 0.8 (0.6) (0.8) (0.4)
Adjusted income tax expense $ (22.9) $ (18.1) $ (45.8) $ (34.6)
Effective tax rate 15.4% 12.1% 19.1% 18.0%
Adjusted effective tax rate 26.0% 21.7% 26.2% 23.1%
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NON-US GAAP FINANCIAL MEASURES
Adjusted 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. Not all companies calculate Adjusted EBITDA in the same manner as James Hardie has and, accordingly,
Adjusted EBITDA may not be comparable with other companies. Management has included information concerning Adjusted
EBITDA because it believes that this data is commonly used by investors to evaluate the ability of a companys earnings from its
core business operations to satisfy its debt, capital expenditure and working capital requirements.
US$ Millions Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
EBIT $ 161.1 $ 145.6 $ 245.6 $ 196.0
Depreciation and amortization 17.6 17.5 35.8 34.1
Adjusted EBITDA $ 178.7 $ 163.1 $ 281.4 $ 230.1
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NON-US GAAP FINANCIAL MEASURES
Adjusted selling, general and administrative expenses Adjusted selling, general and administrative expenses is not a measure of
financial performance under US GAAP and should not be considered to be more meaningful than selling, general and administrative
expenses. Management has included these financial measures to provide investors with an alternative method for assessing its operating
results in a manner that is focused on the performance of its ongoing operations and provides useful information regarding its financial
condition and results of operations. Management uses these non-US GAAP measures for the same purposes.
US$ Millions Three Months and Half Year Ended 30 September
Q216 Q215 1H16 1H15
Selling, general and administrative expen $ 62.6 $ 60.8 $ 124.1 $ 120.7
Excluding:
New Zealand weathertightness claims 0.1 (2.3) (0.1) (1.0)
AICF SG&A expenses (0.3) (0.7) (0.8) (1.3)
Adjusted selling, general and
administrative expenses $ 62.4 $ 57.8 $ 123.2 $ 118.4
Net sales $ 450.2 $ 440.4 $ 878.5 $ 857.2
Selling, general and administrative expenses 13.9% 13.8% 14.1% 14.1%
as a percentage of net sales
Adjusted selling, general and
administrative expenses as a 13.9% 13.1% 14.0% 13.8%
percentage of net sales
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INVESTOR PRESENTATION
JANUARY 2016