James Hardie Industries plc 6-K, filed Aug 16, 2022
James Hardie Industries plc (JHX)
6-K
2022-08-16
For: 2022-06-30
View Original
Added on
April 06, 2026
About this 6-K
James Hardie Industries plc filed this 6-K on August 16, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of August 2022
1-15240
(Commission File Number)
JAMES HARDIE INDUSTRIES plc
(Translation of registrant’s name into English)
Europa House, Second Floor
Harcourt Centre
Harcourt Street, Dublin 2, D02, WR20, Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F..X.... Form 40-F.........
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Not Applicable
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Not Applicable
TABLE OF CONTENTS
2
Forward-Looking Statements
This Form 6-K 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 company’s 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 company’s future performance;
•projections of the company’s results of operations or financial condition;
•statements regarding the company’s 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 company’s 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 company’s plants and future plans with respect to any such projects;
•expectations regarding the extension or renewal of the company’s credit facilities including changes to terms, covenants or ratios;
•expectations concerning dividend payments and share buy-backs;
•statements concerning the company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges;
•uncertainty from the discontinuance of LIBOR and transition to any other interest rate benchmark;
•statements regarding the effect and consequences of the COVID-19 public health crisis;
•statements regarding tax liabilities and related audits, reviews and proceedings;
•statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings;
•expectations about the timing and amount of contributions to AICF, a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims;
•expectations concerning the adequacy of the company’s warranty provisions and estimates for future warranty-related costs;
•statements regarding the company’s 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 or housing market conditions in the regions in which we operate, including but not limited to, 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.
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.
3
Forward-looking statements are based on the Company’s 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 Company’s 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 17 May 2022, 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 funding and the effect of currency exchange rate movements on the amount recorded in the Company’s financial statements as an asbestos liability; 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 Company’s products; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; currency exchange risks; dependence on customer preference and the concentration of the Company’s customer base; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; use of accounting estimates; risk and uncertainties arising out of the COVID-19 public health crisis, including the impact of COVID-19 on our business, sales, results of operations and financial condition and all other risks identified in the Company’s 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 Company’s forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the Company’s 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.
4
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| Results for Announcement to the Market | ||||||||
| ASX Cover 30 June 2022 | ||||||||
| Media Release | ||||||||
| Management’s Analysis of Results | ||||||||
| Management Presentation | ||||||||
| Condensed Consolidated Financial Statements | ||||||||
| James Hardie Industries Chairperson Succession Plan | ||||||||
| Appendix 3X | ||||||||
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| James Hardie Industries plc | ||||||||
| Date: 16 August 2022 | By: /s/ Joseph C. Blasko | |||||||
Joseph C. Blasko | ||||||||
General Counsel, Chief Compliance Officer and Company Secretary | ||||||||
6
EXHIBIT INDEX
| Exhibit No. | Description | |||||||
| Results for Announcement to the Market | ||||||||
| ASX Cover 30 June 2022 | ||||||||
| Media Release | ||||||||
| Management’s Analysis of Results | ||||||||
| Management Presentation | ||||||||
| Condensed Consolidated Financial Statements | ||||||||
| James Hardie Industries Chairperson Succession Plan | ||||||||
| Appendix 3X | ||||||||
7
Exhibit 99.1
James Hardie Industries plc Europa House 2nd Floor, Harcourt Centre Harcourt Street, Dublin 2, D02 WR20, Ireland T: +353 (0) 1 411 6924 F: +353 (0) 1 479 1128 | |||||
16 August 2022
The Manager
Company Announcements Office
Australian Securities Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
Dear Sir/Madam
Results for Announcement to the Market
James Hardie announced today its results for the 1st quarter and three months ended 30 June 2022 and has filed the following documents with the ASX:
| • | ASX Cover Sheet | ||||
| • | Media Release | ||||
| • | Management’s Analysis of Results | ||||
| • | Management Presentation | ||||
| • | Condensed Consolidated Financial Statements | ||||
Copies of these documents are available on James Hardie’s investor relations website at
https://ir.jameshardie.com.au/.
| Yours faithfully | ||
James Brennan-Chong | ||
| Director of Investor Relations and Market Intelligence | ||
This announcement has been authorized for release by the Board of Directors of James Hardie Industries plc.
James Hardie Industries plc is a limited liability company incorporated in Ireland with its registered office at Europa House 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, D02 WR20, Ireland.
Directors: Michael Hammes (Executive Chairman, USA), Anne Lloyd (Deputy Chairperson, USA),
Peter-John Davis (Aus), Persio Lisboa (USA), Rada Rodriguez (Sweden),
Suzanne B. Rowland (USA), Nigel Stein (UK).
Interim Chief Executive Officer and Director: Harold Wiens (USA)
Company number: 485719
ARBN: 097 829 895
Exhibit 99.2
Results for Announcement to the Market
James Hardie Industries plc
ARBN 097 829 895
| Three Months Ended 30 June 2022 | ||||||||||||||
| Key Information | Three Months Ended 30 June | |||||||||||||
FY 2023 US$M | FY 2022 US$M | Movement | ||||||||||||
| Net Sales From Ordinary Activities | 1,000.9 | 843.3 | Up | 19% | ||||||||||
| Profit From Ordinary Activities After Tax Attributable to Shareholders | 163.1 | 121.4 | Up | 34% | ||||||||||
| Net Profit Attributable to Shareholders | 163.1 | 121.4 | Up | 34% | ||||||||||
| Net Tangible Assets per Ordinary Share | US$2.22 | US$1.80 | Up | 23% | ||||||||||
Dividend Information
•The FY2022 second half ordinary dividend (“FY2022 second half dividend”) of US30.0 cents per security was paid to CUFS holders on 29 July 2022.
•The record date to determine entitlements to the FY2022 second half dividend was 27 May 2022 (on the basis of proper instruments of transfer received by the Company’s registrar, Computershare Investor Services Pty Ltd, Level 4, 60 Carrington Street, Sydney NSW 2000, Australia, by 5:00pm if securities are not CHESS approved, or security holding balances established by 5:00pm or such later time permitted by ASTC Operating Rules if securities are CHESS approved).
•The FY2022 second half dividend was, and future dividends will be unfranked for Australian taxation purposes.
•The Company was required to deduct Irish DWT of 25% of the gross dividend amount from this dividend and will be required to for future dividends, unless the beneficial owner has completed and returned a non-resident declaration form (DWT Form).
•The Australian currency equivalent amount of the FY2022 second half dividend paid to CUFS holders was 42.0 Australian cents.
•No dividend reinvestment plan was in operation for the FY2022 second half ordinary dividend.
Movements in Controlled Entities during the three months Ended 30 June 2022
The following entity was created: James Hardie Fiber Cement Europe GmbH (29 June 2022).
The following entity was dissolved: SNC Parc 3 (30 June 2022).
Associates and Joint Venture Entities
FELS Recycling GmbH (51%); Aplicaciones Minerales S.A. (28%)
Review
The results and information included within this Report have been prepared using US GAAP and have been subject to an independent review by external auditors.
| Results for the three months Ended 30 June 2022 | |||||
| Contents | |||||
| 1. | Media Release | ||||
| 2. | Management's Analysis of Results | ||||
| 3. | Management Presentation | ||||
| 4. | Condensed Consolidated Financial Statements | ||||
James Hardie Industries plc is incorporated under the laws of Ireland with its corporate seat in Dublin, Ireland. The liability of members is limited. The information contained in the above documents should be read in conjunction with the James Hardie 2022 Annual Report which can be found on the company website at https://ir.jameshardie.com.au/.
Media Release 16 August 2022 |  | ||||
Exhibit 99.3
James Hardie Industries Announces First Quarter Fiscal Year 2023 Results
Global Net Sales +19% to US$1,000.9 Million for the First Quarter
Adjusted Net Income +15% to US$154.3 Million for the First Quarter
Adjusts Fiscal Year 2023 Adjusted Net Income Guidance Range to US$730 Million and US$780 Million
James Hardie Industries plc (ASX: JHX; NYSE: JHX), the world’s #1 producer and marketer of high- performance fiber cement and fiber gypsum building solutions, today announced results for its first quarter fiscal year 2023, the three-month period ending 30 June 2022.
First Quarter Fiscal Year 2023 Highlights, Compared to First Quarter Fiscal Year 2022, as applicable:
•North America Fiber Cement Segment Net Sales increased +28% to US$740.1 million and EBIT increased +13% to US$191.8 million, with an EBIT margin of 25.9%
•Asia Pacific Fiber Cement Segment Net Sales increased +9% to A$200.1 million and EBIT increased +2% to A$51.3 million, with an EBIT margin of 25.6%
•Europe Building Products Segment Net Sales increased +7% to €110.8 million with an EBIT margin of 10.3%
•Global Adjusted EBIT increased +15% to US$208.4 million, with an Adjusted EBIT margin of 20.8%
•Global Net Sales increased +19% on Global Volume growth of +5%, as all three regions continue to deliver on the global strategy of driving high value product mix penetration
In the first quarter, we continued to deliver growth above market and strong returns. Our critical strategic initiatives remain unchanged and are: (1) market directly to homeowners to accelerate demand creation, (2) penetrate and drive profitable growth in existing and new segments, and (3) commercialize global innovations by expanding into new categories. Further, we remain focused on driving a high value product mix in all three regions.
Speaking to the first quarter result, James Hardie Interim CEO Harold Wiens said, “I am proud to report that the James Hardie team has continued to deliver strong execution of our global strategy. The team’s performance is reflected in strong Price/Mix growth in all three regions, including North America Price/Mix growth of +17%, Asia Pacific Price/Mix growth of +12% and Europe Price/Mix growth of +14%. The global team’s success in delivering high value products is the result of (1) enabling our customers to make more money by selling more James Hardie products and, (2) marketing directly to the homeowners to create demand of our high value products through our customers.”
Mr. Wiens continued, “The current calendar year has seen the macro-economic environment change around us quite significantly, with unprecedented levels of inflation, global supply chain disruptions and a war in Europe. The current macro-economic environment is not only creating uncertainty for the housing markets in all three regions we do business in, but it is also putting pressure on our fiscal year 2023 financial results due to increased input and freight costs. That said, we are confident we will be able to deliver growth above market and strong returns in fiscal year 2023 and that is reflected in our updated guidance we provided today, which at its midpoint represents 22% growth in Adjusted Net Income versus the prior year.”
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 1 | |||||||
Media Release 16 August 2022 | | ||||
Discussing James Hardie’s ability to navigate uncertain markets, Mr. Wiens stated, “We have significant advantages and strengths as we navigate this period of market uncertainty. First, we have a strong balance sheet and significant financial flexibility. Our liquidity is high, our leverage is low, and we have step changed our earnings and cash flow generation. Second, we have a management team with experience in navigating uncertain markets and doing it at James Hardie successfully.”
Mr. Wiens continued, “Our focus is to be prepared for a wide range of potential housing markets and to be positioned to thrive in any of them. We are laser focused on two things we want to deliver during this time of uncertainty: first, delivering strong results and second, accelerating and expanding our competitive advantages. We have already made adjustments to ensure we can deliver on both of these areas of focus.”
Mr. Wiens concluded, “I believe our strategy, along with the depth in our world class leadership team and over 5,000 committed and hard-working employees, will drive James Hardie to meet our mission of being a high-performance global company that delivers organic growth above market with strong returns.”
First Quarter Fiscal Year 2023 Results Compared to First Quarter Fiscal Year 2022 Results
Global: Global Net Sales increased +19% to US$1,000.9 million, while Global Adjusted EBIT increased +15% to US$208.4 million. Global Adjusted Net Income increased +15% to US$154.3 million, compared to US$134.2 million in the prior corresponding period. Global Adjusted EBIT margin of 20.8% was achieved through continued operational improvements and the delivery of a high value product mix offset by high input and freight costs and our ongoing investment in growth initiatives.
North America Fiber Cement Segment: Net Sales increased +28% to US$740.1 million, driven by ongoing execution of our high value product mix strategy that delivered Price/Mix growth of +17%, with robust volume growth of +11% in the quarter. In addition to high value product mix, LEAN manufacturing initiatives continued to generate improved performance across the Company’s North American manufacturing network, helping to deliver +13% EBIT growth to US$191.8 million. The EBIT margin contracted 340 basis points to 25.9%, as significant inflationary pressures impacted the cost of almost all input categories, including significant increases to key cost items, including pulp, cement, labor, natural gas and freight.
North America President, Sean Gadd remarked, “Our North America business delivered robust quarterly Net Sales and EBIT growth, led by the team’s focus and execution on the high value product mix strategy. Through partnering with customers to drive shared growth goals and focusing on creating demand by marketing directly to the homeowner, we remain well positioned to sustain growth above market and deliver strong returns. Our business is well positioned to deliver strong Net Sales and EBIT growth over the remainder of Fiscal Year 2023. We have made adjustments to hold SG&A at current levels for the remainder of the fiscal year, while executing our previously announced price increases, which we expect to generate sequentially improving EBIT margin results throughout Fiscal Year 2023. Our team is also prepared for a variety of US housing market outcomes and are focused on ensuring we will deliver growth above market and strong returns regardless of market conditions.”
Asia Pacific Fiber Cement Segment: Net sales increased +9% to A$200.1 million. EBIT increased +2% to A$51.3 million, at an EBIT margin of 25.6%. The EBIT margin of 25.6% was achieved through the delivery of high value product mix but offset by the impact of rising input costs and our ongoing investment in growth initiatives.
Mr. Wiens said, “The APAC team has delivered another strong set of results. The team’s focus on the high value product mix strategy and partnering closely with our customers allowed the business to deliver 12% Price/Mix growth. Similar to our North American business we are prepared for a variety of housing market conditions and remain focused on ensuring we can drive growth above market and strong returns.”
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 2 | |||||||
Media Release 16 August 2022 | | ||||
Europe Building Products Segment: Net sales increased +7% to €110.8 million, as we partnered with our customers to drive a high value product mix, which resulted in Price/Mix growth of +14%. Fiber Cement Net Sales grew +1% and Fiber Gypsum Net Sales grew +8%. EBIT decreased 16% to €11.4 million, with an EBIT margin of 10.3%. The EBIT margin was reduced by 280 basis points, due to the impact of inflation on key energy prices as well as reduced volumes.
James Hardie Chief Financial Officer, Jason Miele remarked, “The European team’s execution on our high value product mix strategy has resulted in strong Price/Mix growth, which underpins the ongoing transformation of the business. However, our European business is facing significant headwinds from inflationary pressures and a slowing housing market.”
Capital Resources
Operating cash flow generation of US$153.6 million in the first quarter of fiscal year 2023 was driven by strong profitable organic sales growth and the integration of our supply chain with our customers. Working capital increased by US$12.6 million during the first quarter of fiscal year 2023, primarily due to increased inventory levels globally.
Mr. Miele stated, “Our robust cash flow generation has continued into the first quarter, with operating cash flow of US$153.6 million. Our capital allocation focus remains to enable investment in organic growth, including marketing directly to the homeowner, commercializing market-driven product innovations and global capacity expansion. With the uncertainty in the housing markets we participate in, we have continued to adjust our global capacity expansion plans to ensure we are adding capacity in the right regions at the right time. In fiscal year 2023, we have reduced our originally planned capital expansion capital expenditures plan by 29%.”
Sustainability
At James Hardie, we are all committed to Building Sustainable Communities and we recognize that keeping environmental and social considerations at the core of everything we do is fundamental to our success. On 26 July 2022, James Hardie released its FY22 Sustainability Report, highlighting the progress against our goals. Commenting on sustainability, Mr. Wiens said: “The decisions we make each day must be environmentally and socially responsible to create sustainable value for homeowners, our customers and our investors. The Company’s sustainability progress reflects the efforts of our global team, whose passion and commitment drives the success of our business outcomes in a sustainable way.”
For more on our commitment to Sustainability including our goals, see our FY22 Sustainability Report at https://www.jameshardie.com/why-hardie/sustainability
Outlook and Earnings Guidance | ||
Based on the continued, strong execution of the global strategy and with acknowledgement of the uncertain macro-economic conditions, including continued inflationary pressures and housing market uncertainty, management lowered the fiscal year 2023 Adjusted Net Income guidance range. The updated and narrowed 2023 Adjusted Net Income guidance range is US$730 million to US$780 million, changed from the prior range of US$740 million and US$820 million. The comparable prior year Adjusted Net Income for fiscal year 2022 was US$620.7 million.
Mr. Miele stated, “Our primary reasons for adjusting guidance downward are: continued inflationary pressures globally, our lowered expectations regarding Europe segment EBIT, the impact of a strengthening US dollar on the translation of our APAC and Europe earnings and housing market uncertainty.”
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 3 | |||||||
Media Release 16 August 2022 | | ||||
James Hardie’s guidance is based on current estimates and assumptions and is subject to several known and unknown uncertainties and risks.
Key Financial Information | ||
| Q1 FY23 | Q1 FY22 | Change | |||||||||||||||||||||||||||||||||
| Group (US$ millions) | |||||||||||||||||||||||||||||||||||
| Net Sales | 1,000.9 | 843.3 | 19% | ||||||||||||||||||||||||||||||||
| Adjusted EBIT | 208.4 | 180.5 | 15% | ||||||||||||||||||||||||||||||||
| Adjusted EBIT Margin | 20.8% | 21.4% | -0.6 pts | ||||||||||||||||||||||||||||||||
| Adjusted Net Income | 154.3 | 134.2 | 15% | ||||||||||||||||||||||||||||||||
| Operating Cash Flow | 153.6 | 184.1 | (17%) | ||||||||||||||||||||||||||||||||
| North America Fiber Cement (US$ millions) | |||||||||||||||||||||||||||||||||||
| Net Sales | 740.1 | 577.1 | 28% | ||||||||||||||||||||||||||||||||
| EBIT | 191.8 | 169.3 | 13% | ||||||||||||||||||||||||||||||||
| EBIT Margin | 25.9% | 29.3% | -3.4 pts | ||||||||||||||||||||||||||||||||
| Asia Pacific Fiber Cement (A$ millions) | |||||||||||||||||||||||||||||||||||
| Net Sales | 200.1 | 184.1 | 9% | ||||||||||||||||||||||||||||||||
| EBIT | 51.3 | 50.4 | 2% | ||||||||||||||||||||||||||||||||
| EBIT Margin | 25.6% | 27.4% | -1.8 pts | ||||||||||||||||||||||||||||||||
| Europe Building Products (€ millions) | |||||||||||||||||||||||||||||||||||
| Net Sales | 110.8 | 103.3 | 7% | ||||||||||||||||||||||||||||||||
| EBIT | 11.4 | 13.5 | (16%) | ||||||||||||||||||||||||||||||||
| EBIT Margin | 10.3% | 13.1% | -2.8 pts | ||||||||||||||||||||||||||||||||
Further Information | ||
Readers are referred to the Company’s Condensed Consolidated Financial Statements and Management’s Analysis of Results for the first quarter ended 30 June 2022 for additional information regarding the Company’s results, including information regarding income taxes, the asbestos liability and contingent liabilities.
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 4 | |||||||
Media Release 16 August 2022 | | ||||
Management Briefing for Analysts, Investors and Media | ||
James Hardie will conduct a teleconference and audio webcast for analysts, investors, and media on Tuesday 16 August 2022, 8:30am Sydney, Australia time (Monday 15 August 2022, 6:30pm New York City, USA time). Analysts, investors, and media can access the management briefing via the following:
| . | All participants wishing to join the teleconference will need to pre-register by navigating to: https://s1.c-conf.com/diamondpass/10023353-dgs7df.html | ||||
Once registered, you will receive a calendar invite with dial-in numbers and a unique PIN which will be required to join the call.
Webcast Replay: Will be available after the Live Webcast concludes at https://ir.jameshardie.com.au
Use of Non-GAAP Financial Information; Australian Equivalent Terminology | ||
This Media Release includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (GAAP), such as Adjusted net income and Adjusted EBIT. These non-GAAP financial measures should not be considered to be more meaningful than the equivalent GAAP measure. Management has included such 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 excludes the impact of certain legacy items, such as asbestos adjustments. Additionally, management uses such non-GAAP financial measures for the same purposes. However, these non-GAAP financial measures are not prepared in accordance with GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. The Company is unable to forecast the comparable US GAAP financial measure for future periods due to, amongst other factors, uncertainty regarding the impact of actuarial estimates on asbestos-related assets and liabilities in future periods. For additional information regarding the non-GAAP financial measures presented in this Media Release, including a reconciliation of each non-GAAP financial measure to the equivalent GAAP measure, see the section titled “Non-GAAP Financial Measures” included in the Company’s Management’s Analysis of Results for the first quarter ended 30 June 2022.
In addition, this Media Release includes financial measures and descriptions that are considered to not be in accordance with GAAP, but which are consistent with financial measures reported by Australian companies, such as EBIT and EBIT margin. Since the Company prepares its Condensed Consolidated Financial Statements in accordance with GAAP, the Company provides investors with definitions and a cross- reference from the non-GAAP financial measure used in this Media Release to the equivalent GAAP financial measure used in the Company's Condensed Consolidated Financial Statements. See the section titled “Non- GAAP Financial Measures” included in the Company’s Management’s Analysis of Results for the first quarter ended 30 June 2022.
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 5 | |||||||
Media Release 16 August 2022 | | ||||
Forward-Looking Statements | ||
This Media Release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of James Hardie to be materially different from those expressed or implied in this release, including, among others, the risks and uncertainties set forth in Section 3 “Risk Factors” in James Hardie’s Annual Report on Form 20-F for the fiscal year ended March 31, 2022; changes in general economic, political, governmental and business conditions globally and in the countries in which James Hardie does business; changes in interest rates; changes in inflation rates; changes in exchange rates; the level of construction generally; changes in cement demand and prices; changes in raw material and energy prices; changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. James Hardie assumes no obligation to update or correct the information contained in this Media Release except as required by law.
This media release has been authorized by the James Hardie Board of Directors.
END
Investor/Media/Analyst Enquiries:
James Brennan-Chong
Director of Investor Relations and Market Intelligence
| Telephone: | +61 2 9638 9205 | |||||||
| Email: | media@jameshardie.com.au | |||||||
James Hardie Industries plc is a limited liability company incorporated in Ireland with its registered office at Europa House, 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, D02 WR20, Ireland
| Media Release: James Hardie - First Quarter Ended 30 June 2022 | 6 | |||||||
Fiscal 2023 First Quarter Ended 30 June 2022 |  | ||||
Exhibit 99.4
| Management’s Analysis of Results | ||
This Management’s Analysis of Results forms part of a package of information about James Hardie Industries plc’s results. It should be read in conjunction with the other parts of this package, including the Media Release, the Management Presentation and the Condensed Consolidated Financial Statements. Except as otherwise indicated in this Management’s Analysis of Results, James Hardie Industries plc is referred to as “JHI plc.” JHI plc, together with its direct and indirect wholly-owned subsidiaries, are collectively referred to as “James Hardie,” the “Company,” “we,” “our,” or “us.” Definitions for certain capitalized terms used in this Management’s Analysis of Results can be found in the section titled “Non-GAAP Financial Measures.”
This Management’s Analysis of Results includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (“GAAP”). These non-GAAP financial measures should not be considered to be more meaningful than the equivalent GAAP measures. Management has included such measures to provide investors with an alternative method for assessing its financial condition and operating results in a manner that is focused on the performance of its ongoing operations. These measures exclude the impact of certain legacy items, such as asbestos adjustments, or significant non-recurring items, such as asset impairments, restructuring expenses, as well as adjustments to tax expense. In addition, management provides an adjusted effective tax rate, which excludes the tax impact of the pre-tax special items (items listed above) and tax special items. Management believes that this non-GAAP tax measure provides an ongoing effective rate which investors may find useful for historical comparisons and for forecasting and is an alternative method of assessing the economic impact of taxes on the Company, as it more closely approximates payments to taxing authorities. Management uses such non-GAAP financial measures for the same purposes. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures are not prepared in accordance with GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. For additional information regarding the non-GAAP financial measures presented in this Management’s Analysis of Results, including a reconciliation of each non-GAAP financial measure to the equivalent GAAP measure, see the section titled “Non-GAAP Financial Measures.” In addition, this Management’s Analysis of Results includes financial measures and descriptions that are considered to not be in accordance with GAAP, but which are consistent with financial measures reported by Australian companies. Since James Hardie prepares its condensed consolidated financial statements in accordance with GAAP, the Company provides investors with definitions and a cross-reference from the non-GAAP financial measure used in this Management’s Analysis of Results to the equivalent GAAP financial measure used in the Company's Condensed Consolidated Financial Statements. See the section titled “Non-GAAP Financial Measures.”
These documents, along with an audio webcast of the Management Presentation on 16 August 2022, are available from the Investor Relations area of our website at ir.jameshardie.com.au
Investor/Media/Analyst Inquiries:
James Brennan-Chong
Director of Investor Relations and Market Intelligence
Telephone: | +61 2 9638 9205 | |||||||
Email: | media@jameshardie.com.au | |||||||
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 1 | |||||||
| CONSOLIDATED RESULTS | | ||||
| Overview | ||
James Hardie Industries plc is a world leader in the manufacturing of fiber cement building solutions, and a market leader in fiber gypsum and cement-bonded boards in Europe. Our fiber cement building materials include a wide-range of products for both external and internal use across a broad range of applications. We have four reportable segments: North America Fiber Cement, Asia Pacific Fiber Cement, Europe Building Products and Research and Development.
| 1st Quarter Financial Highlights | ||
| US$ Millions (except per share data) | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net sales | $ | 1,000.9 | $ | 843.3 | 19% | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross margin (%) | 33.9 | 36.5 | (2.6 pts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBIT | 221.3 | 183.0 | 21% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 22.1 | 21.7 | 0.4 pts | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT1 | 208.4 | 180.5 | 15% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBIT margin (%)1 | 20.8 | 21.4 | (0.6 pts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 163.1 | 121.4 | 34% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted Net income1 | 154.3 | 134.2 | 15% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share - diluted | $ | 0.37 | $ | 0.27 | 37% | |||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted earnings per share - diluted1 | $ | 0.35 | $ | 0.30 | 17% | |||||||||||||||||||||||||||||||||||||||||||||||||||
1 See section titled “Non-GAAP Financial Measures" for a reconciliation to the equivalent GAAP measure | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
•Net sales increased 19% to US$1,000.9 million on the strength of Price/Mix growth of 14% as we continue to execute our global strategy of driving high value product mix, combined with volume growth of 5%. Our Price/Mix is the result of 1) enabling our customers to drive an increase in revenue by selling more James Hardie products and, 2) marketing directly to homeowners to create demand for our high value products through our customers.
•Adjusted EBIT increased 15% to US$208.4 million with an adjusted EBIT margin of 20.8%. On a global basis, high input costs that included significant inflationary pressures were partially offset with the shift to a high value product mix and the continued execution of LEAN.
The Company's critical strategic initiatives remain unchanged and our global management team is committed to executing our strategies which include: (1) marketing directly to homeowners to accelerate demand creation, (2) penetrating and driving profitable growth in existing and new segments, and (3) commercializing global innovations by expanding into new categories. Additionally, we will continue to focus on driving high value products through our customers.
The first quarter consolidated results delivered strong results and organic growth above market while still demonstrating our commitment to investing significantly in marketing, innovation and talent.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 2 | |||||||
| OPERATING RESULTS | | ||||
| North America Fiber Cement Segment | ||
Operating results for the North America Fiber Cement segment were as follows:
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||
| Volume (mmsf) | 823.7 | 738.9 | 11% | |||||||||||||||||||||||||||||||||||
| Fiber cement net sales | 740.1 | 577.1 | 28% | |||||||||||||||||||||||||||||||||||
| Gross profit | 17% | |||||||||||||||||||||||||||||||||||||
| Gross margin (%) | (3.1 pts) | |||||||||||||||||||||||||||||||||||||
| EBIT | 191.8 | 169.3 | 13% | |||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 25.9 | 29.3 | (3.4 pts) | |||||||||||||||||||||||||||||||||||
Q1 FY23 vs Q1 FY22
Net sales increased 28%, due to an increase in our Price/Mix of 17% and volume growth of 11%. The increase in our Price/Mix resulted from the continued execution of our strategy to drive a high value product mix combined with our January 2022 strategic pricing increase.
Gross margin decreased as a result of the following components:
| Higher average net sales price | 8.2 | pts | |||
| Higher production and distribution costs | (11.3 | pts) | |||
| Total percentage point change in gross margin | (3.1 | pts) | |||
Higher production and distribution costs resulted from significant inflationary pressures across almost all categories, with the largest impacts on gross margin being increased costs of freight, pulp, natural gas, labor and cement.
SG&A expenses increased 33% as we continue to invest in marketing and talent. As a percentage of sales, SG&A expenses increased 0.3 percentage points.
EBIT margin decreased 3.4 percentage points to 25.9%, driven by lower gross margin and higher SG&A expenses.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 3 | |||||||
| OPERATING RESULTS | | ||||
| Asia Pacific Fiber Cement Segment | ||
The Asia Pacific Fiber Cement segment is comprised of the following regions: (i) Australia; (ii) New Zealand; and (iii) the Philippines.
Operating results for the Asia Pacific Fiber Cement segment in US dollars were as follows:
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||
| Volume (mmsf) | 150.2 | 154.8 | (3%) | |||||||||||||||||||||||||||||||||||
| Fiber cement net sales | 142.8 | 141.8 | 1% | |||||||||||||||||||||||||||||||||||
| Gross profit | (3%) | |||||||||||||||||||||||||||||||||||||
| Gross margin (%) | (1.3 pts) | |||||||||||||||||||||||||||||||||||||
| EBIT | 36.6 | 38.8 | (6%) | |||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 25.6 | 27.4 | (1.8 pts) | |||||||||||||||||||||||||||||||||||
Operating results for the Asia Pacific Fiber Cement segment in Australian dollars were as follows:
| A$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||
| Volume (mmsf) | 150.2 | 154.8 | (3%) | |||||||||||||||||||||||||||||||||||
| Fiber cement net sales | 200.1 | 184.1 | 9% | |||||||||||||||||||||||||||||||||||
| Gross profit | 5% | |||||||||||||||||||||||||||||||||||||
| Gross margin (%) | (1.3 pts) | |||||||||||||||||||||||||||||||||||||
| EBIT | 51.3 | 50.4 | 2% | |||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 25.6 | 27.4 | (1.8 pts) | |||||||||||||||||||||||||||||||||||
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 4 | |||||||
| OPERATING RESULTS | | ||||
Q1 FY23 vs Q1 FY22 (A$)
Net sales increased 9%, driven by Price/Mix growth of 12%, partially offset by lower volume of 3%. The growth in Price/Mix was attributable to price increases across all markets and the continued execution of our high value product mix strategy. Volume was adversely impacted by unusually high rainfall in Australia during Q1 FY23, which suppressed building activity.
The decrease in gross margin can be attributed to the following components:
| Higher average net sales price | 6.6 | pts | |||
| Higher production and distribution costs | (7.9 | pts) | |||
| Total percentage point change in gross margin | (1.3 | pts) | |||
Higher production and distribution costs resulted from significant inflationary pressures across almost all categories, with the largest impacts on gross margin being increased costs of pulp and energy and higher freight costs.
SG&A expenses increased 13%, primarily driven by higher employee costs as we continue to invest in talent. As a percentage of sales, SG&A expenses increased 0.3 percentage points.
EBIT margin of 25.6% decreased 1.8 percentage points, driven by lower gross margin and higher SG&A expenses.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 5 | |||||||
| OPERATING RESULTS | | ||||
| Europe Building Products Segment | ||
The Europe Building Products segment is comprised of: (i) Europe Fiber Cement; and (ii) Europe Fiber Gypsum.
Operating results for the Europe Building Products segment in US dollars were as follows:
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||
| Volume (mmsf) | 229.4 | 246.9 | (7%) | |||||||||||||||||||||||||||||||||||
| Fiber cement net sales | 18.6 | 20.7 | (10%) | |||||||||||||||||||||||||||||||||||
Fiber gypsum net sales1 | 99.4 | 103.7 | (4%) | |||||||||||||||||||||||||||||||||||
| Net sales | 118.0 | 124.4 | (5%) | |||||||||||||||||||||||||||||||||||
| Gross profit | (15%) | |||||||||||||||||||||||||||||||||||||
| Gross margin (%) | (3.0 pts) | |||||||||||||||||||||||||||||||||||||
| EBIT | 12.1 | 16.3 | (26%) | |||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 10.3 | 13.1 | (2.8 pts) | |||||||||||||||||||||||||||||||||||
1Also includes cement bonded board net sales | ||||||||||||||||||||||||||||||||||||||
Operating results for the Europe Building Products segment in Euros were as follows:
| € Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | ||||||||||||||||||||||||||||||||||||
| Volume (mmsf) | 229.4 | 246.9 | (7%) | |||||||||||||||||||||||||||||||||||
| Fiber cement net sales | 17.4 | 17.2 | 1% | |||||||||||||||||||||||||||||||||||
Fiber gypsum net sales1 | 93.4 | 86.1 | 8% | |||||||||||||||||||||||||||||||||||
| Net sales | 110.8 | 103.3 | 7% | |||||||||||||||||||||||||||||||||||
| Gross profit | (4%) | |||||||||||||||||||||||||||||||||||||
| Gross margin (%) | (3.0 pts) | |||||||||||||||||||||||||||||||||||||
| EBIT | 11.4 | 13.5 | (16%) | |||||||||||||||||||||||||||||||||||
| EBIT margin (%) | 10.3 | 13.1 | (2.8 pts) | |||||||||||||||||||||||||||||||||||
1Also includes cement bonded board net sales | ||||||||||||||||||||||||||||||||||||||
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 6 | |||||||
| OPERATING RESULTS | | ||||
Q1 FY23 vs Q1 FY22 (€)
Net sales increased 7% due to 14% growth in Price/Mix, partially offset by a 7% decrease in volume. Higher Price/Mix was driven by our strategic price increase along with our shift to a higher value mix in both our fiber cement and fiber gypsum product lines. The volume decrease was primarily due to lower fiber gypsum volumes as market activity decreased.
The decrease in gross margin is attributable to the following components:
| Higher average net sales price | 7.6 | pts | |||
| Higher production and distribution costs | (10.6 | pts) | |||
| Total percentage point change in gross margin | (3.0 | pts) | |||
Higher production and distribution costs resulted from significant inflationary pressures across almost all categories, with the largest impacts on gross margin being increased costs of natural gas, freight, paper, packaging costs and electricity.
SG&A expenses increased 6% primarily due to our continued investment in growth and marketing. As a percentage of sales, SG&A expenses decreased 0.1 percentage point.
EBIT margin of 10.3% decreased 2.8 percentage points primarily driven by lower gross margin.
| General Corporate | ||
Results for General Corporate were as follows:
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change % | ||||||||||||||||||||||||||||||||||||
| General Corporate SG&A expenses | $ | 23.7 | $ | 35.5 | (33) | |||||||||||||||||||||||||||||||||
| Asbestos: | ||||||||||||||||||||||||||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | (371) | |||||||||||||||||||||||||||||||||||
| AICF SG&A expenses | 0.3 | 0.3 | — | |||||||||||||||||||||||||||||||||||
| General Corporate costs | $ | 10.8 | $ | 33.0 | (67) | |||||||||||||||||||||||||||||||||
General Corporate SG&A expenses decreased US$11.8 million primarily due to lower stock compensation expenses.
Asbestos adjustments primarily reflect the non-cash foreign exchange re-measurement impact on asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate from the beginning balance sheet date to the ending balance sheet date, for each respective period. In addition, these amounts are partially offset by gains and losses on foreign currency forward contracts related to future AICF payments.
Readers are referred to Note 6 of our 30 June 2022 condensed consolidated financial statements for further information on asbestos.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 7 | |||||||
| OPERATING RESULTS | | ||||
| Interest, net | ||
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change % | ||||||||||||||||||||||||||||||||||||
| Gross interest expense | $ | 9.9 | $ | 10.7 | (7) | |||||||||||||||||||||||||||||||||
| Capitalized interest | (0.8) | (0.5) | 60 | |||||||||||||||||||||||||||||||||||
| Interest income | (0.1) | — | 100 | |||||||||||||||||||||||||||||||||||
| Net AICF interest income | (0.2) | (0.1) | 100 | |||||||||||||||||||||||||||||||||||
| Interest, net | $ | 8.8 | $ | 10.1 | (13) | |||||||||||||||||||||||||||||||||
Interest, net decreased primarily due to lower interest expense on our Euro notes as a result of favorable Euro to USD exchange rates.
| Income Tax | ||
| Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change | |||||||||||||||||||||||||||||||||
| Income tax expense (US$ Millions) | 49.2 | 51.3 | (4%) | ||||||||||||||||||||||||||||||||
| Effective tax rate (%) | 23.2 | 29.7 | (6.5 pts) | ||||||||||||||||||||||||||||||||
Adjusted income tax expense1 (US$ Millions) | 44.9 | 35.9 | 25% | ||||||||||||||||||||||||||||||||
Adjusted effective tax rate1 (%) | 22.5 | 21.1 | 1.4 pts | ||||||||||||||||||||||||||||||||
1Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments | |||||||||||||||||||||||||||||||||||
The effective tax rate decreased 6.5 percentage points, primarily due to Asbestos and other tax adjustments.
The Adjusted effective tax rate increased 1.4 percentage points, primarily due to a change in the geographic mix of earnings.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 8 | |||||||
| OPERATING RESULTS | | ||||
| Net Income | ||
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||||||||||||||
| FY23 | FY22 | Change % | ||||||||||||||||||||||||||||||||||||
| EBIT | ||||||||||||||||||||||||||||||||||||||
| North America Fiber Cement | $ | 191.8 | $ | 169.3 | 13 | |||||||||||||||||||||||||||||||||
| Asia Pacific Fiber Cement | 36.6 | 38.8 | (6) | |||||||||||||||||||||||||||||||||||
| Europe Building Products | 12.1 | 16.3 | (26) | |||||||||||||||||||||||||||||||||||
| Research and Development | (8.4) | (8.4) | — | |||||||||||||||||||||||||||||||||||
General Corporate1 | (23.7) | (35.5) | 33 | |||||||||||||||||||||||||||||||||||
| Adjusted EBIT | 208.4 | 180.5 | 15 | |||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||
Adjusted interest, net1 | 9.0 | 10.2 | (12) | |||||||||||||||||||||||||||||||||||
| Other expense | 0.2 | 0.2 | — | |||||||||||||||||||||||||||||||||||
Adjusted income tax expense2 | 44.9 | 35.9 | 25 | |||||||||||||||||||||||||||||||||||
| Adjusted net income | $ | 154.3 | $ | 134.2 | 15 | |||||||||||||||||||||||||||||||||
1Excludes Asbestos-related expenses and adjustments 2Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos and other tax adjustments | ||||||||||||||||||||||||||||||||||||||
Adjusted net income of US$154.3 million increased 15%, primarily driven by strong performance in North America and lower general corporate costs, partially offset by higher adjusted income tax expense.
1
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 9 | |||||||
| OTHER INFORMATION | | ||||
| Cash Flow | ||
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||
| FY23 | FY22 | Change | Change % | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 153.6 | $ | 184.1 | $ | (30.5) | (17) | |||||||||||||||||||
| Net cash used in investing activities | 215.8 | 43.9 | 171.9 | 392 | ||||||||||||||||||||||
| Net cash provided by (used in) financing activities | 8.9 | (240.0) | 248.9 | 104 | ||||||||||||||||||||||
Significant sources and uses of cash during the first quarter of fiscal year 2023 include:
•Cash provided by operating activities:
◦Higher net sales and profitability led to net income, adjusted for non-cash items, of US$226.8 million;
◦Working capital increased by US$12.6 million, primarily due to higher inventory levels; and
◦Asbestos claims paid of US$28.6 million.
•Cash used in investing activities:
◦Capital expenditures of US$174.1 million, includes A$84.2 million for land purchased in Melbourne, Australia and North America capacity expansion project spend of US$64.3 million; and
◦AICF net investments of US$40.9 million.
•Cash provided by financing activities primarily includes US$10.0 million in net drawdowns on our revolving credit facility.
| Capacity Expansion | ||
As previously announced, we are investing in a transformational global capacity expansion program, including brownfield and greenfield expansions in all three regions. We continue to review the macro-economic conditions and the impacts on the housing markets we do business in as we plan and execute this global capacity expansion program.
During fiscal year 2023, we expect to commission the following assets/facilities:
North America
•Trim finishing capacity in Prattville, Alabama
•ColorPlus® finishing capacity in Westfield, Massachusetts
Asia Pacific
•Brownfield expansion in Carole Park, Australia
In addition, during fiscal year 2023, we expect to:
North America
•Purchase land for a future Greenfield site in the USA
•Continue construction of Sheet Machines #3 and #4 in Prattville, Alabama, executing against our original timeline
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 10 | |||||||
| OTHER INFORMATION | | ||||
Asia Pacific
•Begin construction of our Greenfield site in Melbourne, Victoria
Europe
•Purchase land for a future Greenfield site in Europe
We will continue to review and monitor the macro-economic conditions and the impacts on the housing markets we do business in as we plan and execute this global capacity expansion program. We continue to estimate the total investment to be between US$1.6 billion to US$1.8 billion.
| Liquidity and Capital Allocation | ||
Our cash position increased US$12.3 million, from US$125.0 million at 31 March 2022 to US$137.3 million at 30 June 2022. We also have US$542.8 million of available borrowing capacity under our revolving credit facility at 30 June 2022.
During fiscal year 2023, we will contribute A$160.4 million to AICF in quarterly installments; the first payment of A$39.7 million was made 1 July 2022.
Based on our existing cash balances, together with anticipated operating cash flows and unutilized credit facilities, we anticipate we will have sufficient funds to meet our planned working capital and other expected cash requirements for the next twelve months.
| Capital Management | ||
We periodically review our capital structure and capital allocation objectives and expect the following capital management focus in the short term:
•Preserve and enable strong liquidity position and financial flexibility;
•Invest in organic growth: capacity expansion, market driven innovation and marketing directly to the homeowner;
•Maintain leverage ratio of less than 2x; and
•Return capital to shareholders.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 11 | |||||||
| NON-GAAP FINANCIAL TERMS | | ||||
| Financial Measures - GAAP equivalents | ||
This document contains the financial statement line item EBIT, which is considered to be non-GAAP, but is consistent with the term used by Australian companies. Because we prepare our condensed consolidated financial statements under GAAP, the equivalent GAAP financial statement line item description used in our condensed consolidated financial statements is Operating income (loss).
EBIT – Earnings before interest and tax.
EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales.
| Non GAAP Financial Terms | ||
This Management’s Analysis of Results includes certain financial information to supplement the Company’s condensed consolidated financial statements which are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These financial measures are designed to provide investors with an alternative method for assessing our performance from on-going operations, capital efficiency and profit generation. Management uses these financial measures for the same purposes. These financial measures include:
| • | Adjusted EBIT; | ||||||||||
| • | Adjusted EBIT margin; | ||||||||||
| • | Adjusted interest, net; | ||||||||||
| • | Adjusted net income; | ||||||||||
| • | Adjusted diluted earnings per share; | ||||||||||
| • | Adjusted income before income taxes; | ||||||||||
| • | Adjusted income tax expense; and | ||||||||||
| • | Adjusted effective tax rate | ||||||||||
These financial measures are or may be non-GAAP financial measures as defined in the rules of the U.S. Securities and Exchange Commission and may exclude or include amounts that are included or excluded, as applicable, in the calculation of the most directly comparable financial measures calculated in accordance with GAAP. These financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with the Company’s condensed consolidated financial statements prepared in accordance with GAAP. In evaluating these financial measures, investors should note that other companies reporting or describing similarly titled financial measures may calculate them differently and investors should exercise caution in comparing the Company’s financial measures to similar titled measures by other companies.
| Definitions | ||
AFFA – Amended and Restated Final Funding Agreement
AICF – Asbestos Injuries Compensation Fund Ltd
Sales Volume
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. | |||||
Price/Mix – The percentage growth in revenue attributable to price increases and shift in mix of products sold. Price/Mix is calculated as the Net Sales growth percentage less the Volume growth percentage.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 12 | |||||||
| NON-GAAP FINANCIAL MEASURES | | ||||
| Financial Measures - GAAP equivalents | ||
Adjusted EBIT
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||
| FY23 | FY22 | |||||||||||||||||||||||||
| EBIT | $ | 221.3 | $ | 183.0 | ||||||||||||||||||||||
| Asbestos: | ||||||||||||||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | ||||||||||||||||||||||||
| AICF SG&A expenses | 0.3 | 0.3 | ||||||||||||||||||||||||
| Adjusted EBIT | $ | 208.4 | $ | 180.5 | ||||||||||||||||||||||
| Net sales | 1,000.9 | 843.3 | ||||||||||||||||||||||||
| Adjusted EBIT margin | 20.8% | 21.4% | ||||||||||||||||||||||||
Adjusted interest, net
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||
| FY23 | FY22 | |||||||||||||||||||||||||
| Interest, net | $ | 8.8 | $ | 10.1 | ||||||||||||||||||||||
| AICF interest income, net | (0.2) | (0.1) | ||||||||||||||||||||||||
| Adjusted interest, net | $ | 9.0 | $ | 10.2 | ||||||||||||||||||||||
Adjusted net income
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||
| FY23 | FY22 | |||||||||||||||||||||||||
| Net income | $ | 163.1 | $ | 121.4 | ||||||||||||||||||||||
| Asbestos: | ||||||||||||||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | ||||||||||||||||||||||||
| AICF SG&A expenses | 0.3 | 0.3 | ||||||||||||||||||||||||
| AICF interest income, net | (0.2) | (0.1) | ||||||||||||||||||||||||
Tax adjustments1 | 4.3 | 15.4 | ||||||||||||||||||||||||
| Adjusted net income | $ | 154.3 | $ | 134.2 | ||||||||||||||||||||||
1Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments | ||||||||||||||||||||||||||
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 13 | |||||||
| NON-GAAP FINANCIAL MEASURES | | ||||
Adjusted diluted earnings per share
| Three Months Ended 30 June | ||||||||||||||||||||||||||
| FY23 | FY22 | |||||||||||||||||||||||||
| Adjusted net income (US$ millions) | $ | 154.3 | $ | 134.2 | ||||||||||||||||||||||
Weighted average common shares outstanding - Diluted (millions) | 445.9 | 445.7 | ||||||||||||||||||||||||
| Adjusted diluted earnings per share | $ | 0.35 | $ | 0.30 | ||||||||||||||||||||||
Adjusted effective tax rate
| US$ Millions | Three Months Ended 30 June | |||||||||||||||||||||||||
| FY23 | FY22 | |||||||||||||||||||||||||
| Income before income taxes | $ | 212.3 | $ | 172.7 | ||||||||||||||||||||||
| Asbestos: | ||||||||||||||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | ||||||||||||||||||||||||
| AICF SG&A expenses | 0.3 | 0.3 | ||||||||||||||||||||||||
| AICF interest income, net | (0.2) | (0.1) | ||||||||||||||||||||||||
| Adjusted income before income taxes | $ | 199.2 | $ | 170.1 | ||||||||||||||||||||||
| Income tax expense | 49.2 | 51.3 | ||||||||||||||||||||||||
Tax adjustments1 | (4.3) | (15.4) | ||||||||||||||||||||||||
| Adjusted income tax expense | $ | 44.9 | $ | 35.9 | ||||||||||||||||||||||
| Effective tax rate | 23.2% | 29.7% | ||||||||||||||||||||||||
| Adjusted effective tax rate | 22.5% | 21.1% | ||||||||||||||||||||||||
1Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments | ||||||||||||||||||||||||||
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 14 | |||||||
| FORWARD-LOOKING STATEMENTS | | ||||
This Management’s Analysis of Results 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 Company’s 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 Company’s future performance;
▪projections of the Company’s results of operations or financial condition;
▪statements regarding the Company’s 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 Company’s 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 Company’s plants and future plans with respect to any such projects;
▪expectations regarding the extension or renewal of the Company’s credit facilities including changes to terms, covenants or ratios;
▪expectations concerning dividend payments and share buy-backs;
▪statements concerning the Company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges;
▪uncertainty from the discontinuance of LIBOR and transition to any other interest rate benchmark;
▪statements regarding the effect and consequences of the COVID-19 public health crisis;
▪statements regarding tax liabilities and related audits, reviews and proceedings;
▪statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings;
▪expectations about the timing and amount of contributions to AICF, a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims;
▪expectations concerning the adequacy of the Company’s warranty provisions and estimates for future warranty-related costs;
▪statements regarding the Company’s 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 or housing market conditions in the regions in which we operate, including but not limited to, 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.
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 Company’s 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 Company’s 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 17 May 2022, 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 funding and the effect of currency exchange rate movements on the amount recorded in the Company’s financial statements as an asbestos liability; 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 Company’s products; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; currency exchange risks; dependence on customer preference and the concentration of the Company’s customer base; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; use of accounting estimates; risk and uncertainties arising out of the COVID-19 public health crisis, including the impact of COVID-19 on our business, sales, results of operations and financial condition and all other risks identified in the Company’s 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 Company’s forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the Company’s 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.
| Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2023 | 15 | |||||||
Q1 FY23 MANAGEMENT PRESENTATION 16 August 2022
Page 2 James Hardie Q1 FY23 Results 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 “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 media releases and other written materials and in oral statements made by the Company’s officers, directors or employees to analysts, institutional investors, representatives of the media and others. 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. These forward‐looking statements are based upon management's current expectations, estimates, assumptions and beliefs concerning future events and conditions. Readers are cautioned not to place undue reliance on any forward‐ looking statements. Forward‐looking statements are necessarily subject to risks, uncertainties and other factors, many of which are unforeseeable and beyond the Company’s control. Many factors could cause actual results, performance or achievements to be materially different from those expressed or implied in this Management Presentation, including, among others, the risks and uncertainties set forth in Section 3 “Risk Factors” in James Hardie’s Annual Report on Form 20‐F for the year ended 31 March 2022; changes in general economic, political, governmental and business conditions globally and in the countries in which the Company does business, including the impact of COVID‐19; changes in interest rates; changes in inflation rates; changes in exchange rates; the level of construction generally; changes in cement demand and prices; changes in raw material and energy prices; changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. James Hardie assumes no obligation to update or correct the information contained in this Management Presentation except as required by law. This Management Presentation includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (GAAP). These financial measures are designed to provide investors with an alternative method for assessing our performance from on‐going operations, capital efficiency and profit generation. Management uses these financial measures for the same purposes. These financial measures are or may be non‐GAAP financial measures as defined in the rules of the U.S. Securities and Exchange Commission and may exclude or include amounts that are included or excluded, as applicable, in the calculation of the most directly comparable financial measures calculated in accordance with GAAP. These non‐GAAP financial measures should not be considered to be more meaningful than the equivalent GAAP measure. Management has included such 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 excludes the impact of certain legacy items, such as asbestos adjustments. Additionally, management uses such non‐GAAP financial measures for the same purposes. However, these non‐GAAP financial measures are not prepared in accordance with GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. For additional information regarding the non‐GAAP financial measures presented in this Management Presentation, including a reconciliation of each non‐GAAP financial measure to the equivalent GAAP measure, see the slide titled “Non‐GAAP Financial Measures” included in the Appendix to this Management Presentation. In addition, this Management Presentation includes financial measures and descriptions that are considered to not be in accordance with GAAP, but which are consistent with financial measures reported by Australian companies, such as operating profit, EBIT and EBIT margin. Since the Company prepares its Consolidated Financial Statements in accordance with GAAP, the Company provides investors with definitions and a cross‐reference from the non‐GAAP financial measure used in this Management Presentation to the equivalent GAAP financial measure used in the Company’s Consolidated Financial Statements. See the section titled “Non‐GAAP Financial Measures” included in the Appendix to this Management Presentation. CAUTIONARY NOTE ON FORWARD‐LOOKING STATEMENTS USE OF NON‐GAAP FINANCIAL INFORMATION; AUSTRALIAN EQUIVALENT TERMINOLOGY
Page 3 James Hardie Q1 FY23 Results AGENDA • Strategy Update • Q1 FY23 Financial Results • North America Update • Capital Allocation, Capacity Expansion & Guidance • Questions and Answers Harold Wiens Interim CEO Jason Miele CFO Sean Gadd North America President
Page 4 James Hardie Q1 FY23 Results JAMES HARDIE TO HOST GLOBAL INVESTOR DAY When:Monday and Tuesday, 12‐13 September Where: Ziegfeld Ballroom, New York City Registration link HERE Who: James Hardie leadership, key customers and partners Key topics • Strategy • Markets • Customer integration and engagement • Marketing to the Homeowner • Innovation • APAC • Europe • ESG
STRATEGY UPDATE
Page 6 James Hardie Q1 FY23 Results STRATEGY IS UNCHANGED AND CONTINUES TO DRIVE PROFITABLE GLOBAL GROWTH Market to Homeowners to Create Demand Penetrate and Drive Profitable Growth in Existing and New Segments Commercialize Global Innovations by Expanding Into New Categories Continued Execution and Expansion of Foundational Initiatives: i) LEAN Manufacturing ii) Customer Engagement iii) Supply Chain Integration 1 2 3 Zero Harm & ESG
Page 7 James Hardie Q1 FY23 Results ADJUSTING IN AN UNCERTAIN MARKET United Kingdom NSW, Australia The current Macro‐economic environment: • Has significantly increased input costs and freight costs in FY23 • Is creating uncertainty for the housing sector in all three regions James Hardie: • Remains Financially strong • Has a management team with proven ‘uncertain market’ experience • Continues to invest in growth We are preparing for all scenarios, and: 1. Deliver strong results throughout, AND 2. Accelerate and expand our competitive advantages
Q1 FY23 FINANCIAL RESULTS
Page 9 James Hardie Q1 FY23 Results • Net Sales increased +19% and exceeded US$1.0 billion for the first time in JHX history • All 3 regions are simultaneously executing on the Global Strategy • Adjusted Net Income increased 15% • Operating cash flow of US$153.6 million remains at step‐changed level • Adjustments to ensure: Growth above market and Strong Returns in FY23 Position ourselves for strong FY24 and beyond GLOBAL RESULTS M M M M % US$153.6 -17% -1.1 pts 24.9 +15% US$154.3 +15% Operating Cash Flow Adjusted Net Income2 Adjusted EBIT1 Sales Volume Net Sales Q1 FY23 1,203.3 2 Excludes asbestos related expenses and adjustments, and tax adjustments 1 Excludes asbestos related expenses and adjustments mmsf +5% US$1,000.9 +19% Adjusted EBITDA Margin1 US$208.4
Page 10 James Hardie Q1 FY23 Results APAC SUMMARY • 9% increase in Net Sales driven by strong Price/Mix growth of +12% • 3% decline in volumes, primarily driven by adverse weather in Australia • Continued execution in driving High Value Product penetration • Growth in high value innovations • Second price increase to take effect in September‐October • 2% growth in EBIT at an EBIT Margin of 25.6% • Strong Net Sales growth • Continued execution of LEAN manufacturing • Freight cost $/mmsf +20% pcp • Pulp $/mmsf +26% pcp • Energy $/mmsf +53% pcp M M % % Q1 FY23 -3% EBIT Margin 25.6 Price/Mix -1.8 pts +12% EBIT A$51.3 +2% Net Sales A$200.1 +9% Sales Volume 150.2 mmsf 27.8 EBITDA Margin -2.1 pts
Page 11 James Hardie Q1 FY23 Results EUROPE SUMMARY • 7% increase in Net Sales driven by strong Price/Mix growth of +14% • 7% decline in volumes as housing activity slowed • EBIT decreased 16% at an EBIT margin of 10.3% • Net Sales Growth, more than offset by: • Significant inflation of input and freight costs: • Energy/mmsf +62% vs pcp • Freight/mmsf +26% vs pcp • Recycled Paper/mmsf +27% vs pcp • SG&A investment, primarily in marketing and talent capability • Remain focused on long‐term strategy of becoming Euro 1.0 billion Net Sales business at 20+% EBIT Margin M M % % Net Sales +7% €110.8 +14% EBITDA Margin 15.9 -3.3 pts EBIT EBIT Margin 10.3 Price/Mix Q1 FY23 Sales Volume 229.4 mmsf -7% Fiber Gypsum Net Sales Fiber Cement Net Sales +1% +8% -2.8 pts €11.4 -16%
Page 12 James Hardie Q1 FY23 Results NORTH AMERICA SUMMARY • 28% increase in Q1 FY23 Net Sales led by volume and Price/Mix growth • Continued execution in driving High Value Product penetration with our customers • +11% volume growth • Price/Mix growth of +17% • ColorPlus volumes +31% • 13% EBIT growth with an EBIT Margin of 25.9% • Strong Net Sales growth • Execution of LEAN manufacturing • Ongoing inflationary pressures for key raw materials and freight • Ongoing investment in growth M M % % Q1 FY23 823.7 mmsf +11% EBITDA Margin 30.0 -3.9 pts +17%Price/Mix US$740.1 Net Sales EBIT Margin EBIT 25.9 -3.4 pts US$191.8 +13% +28% Sales Volume
Page 13 James Hardie Q1 FY23 Results NORTH AMERICA INFLATION Price Mix +17% COGS $/mmsf +21% SG&A Investment ($) +33% Q1 FY23 vs. Q1 FY22 Q1 FY23 vs. Q4 FY22 Price Mix +6% COGS $/mmsf +11% SG&A Investment ($) +15% Pulp $/mmsf +8% Freight $/mmsf +17% Cement $/mmsf +17% Pulp $/mmsf +16% Freight $/mmsf +9% Cement $/mmsf +5%
NORTH AMERICA UPDATE
Page 15 James Hardie Q1 FY23 Results DELIVERING A STRONG FY23 FY23: Key Metrics Net Sales Growth EBIT Margin Target 18+% 28‐32% FY21 Quarterly Avg. FY22 Quarterly Avg. Q1 FY23 NA SG&A (US$ Million) 25.9% 0% 10% 20% 30% Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 N A EB IT M ar gi n (% ) Illustrative NA EBIT Margin (%) FY21 FY22 FY23 Projected Future State NA Volume Mix Lower Value Products: Including Hardie® Backer Boards and Cemplank High Value Products: Hardie® Exteriors High Value Products: Hardie® Exteriors w/ ColorPlus® Technology High Value Products: Innovations
Page 16 James Hardie Q1 FY23 Results NORTH AMERICA – FLEXIBILITY FOR FY24 AND BEYOND 1 Continue to build and accelerate customer engagement and partnership 2 In FY23 maintain quarterly SG&A flat to Q1FY23 to retain flexibility heading into FY24 3 Continue to invest in marketing to the homeowner to drive long term strategic growth
Page 17 James Hardie Q1 FY23 Results CONNECTING THE ROPE Managing Relationships Across the Repair and Remodel Value Chain to Drive Profitable Growth Marketing Directly to Homeowners Partnering With Customers Working Closely With Contractors / Installers
Page 18 James Hardie Q1 FY23 Results MAGNOLIA Focused on ColorPlus® Technology finished products 16 colors curated by Joanna Gaines leveraging ColorPlus® Technology finishes Builds additional credibility with homeowners Joanna Gaines builds trust and credibility around aesthetic design Chip Gaines builds trust and credibility around durability and low maintenance @JoannaGaines @JamesHardie @MagnoliaHome @ChipGaines
Page 19 James Hardie Q1 FY23 Results HOMEOWNER VISUALIZATION TOOL Investing in a Visualization tool, launching with the Magnolia Home |James Hardie Collection Enabling the homeowner’s path to purchase by letting her explore design options with various products and colors on her own home 3‐D renderings and auto‐generated measurements facilitate contractor information and install
CAPITAL ALLOCATION, CAPACITY EXPANSION & GUIDANCE
Page 21 James Hardie Q1 FY23 Results CAPITAL ALLOCATION • Preserve strong liquidity and flexibility • Invest in organic growth: capacity expansion, market driven innovation & marketing • Maintain net leverage ratio of less than 2x • 0.73x leverage ratio as of 30 June 2022 • Return capital to shareholders
Page 22 James Hardie Q1 FY23 Results CAPACITY EXPANSION Europe Capacity Expansion − Fiber Gypsum brownfield expansion in Orejo, Spain (Q4 FY24) − Fiber Cement greenfield expansion APAC Capacity Expansion − Carole Park brownfield expansion (Q3 FY23) − Greenfield expansion in Melbourne − Rosehill Pilot North America Capacity Expansion − Prattville Trim finishing (Q2 FY23) − Massachusetts ColorPlus® finishing (Q4 FY23) − Brownfield expansion in Prattville, sheet machines #3 & #4 (Q3 FY24) − Greenfield expansion in USA − Fontana Pilot
Page 23 James Hardie Q1 FY23 Results FULL YEAR FISCAL YEAR 2023 GUIDANCE Management adjusts full year FY23 Adjusted Net Income1 guidance to: US$730 million and US$780 million a 22% increase at the mid point relative to FY22 North America Guidance – Full Year FY23 Net Sales Growth 18+% growth versus FY22 EBIT margin 28‐32% James Hardie’s guidance is based on current estimates and assumptions and is subject to a number of known and unknown uncertainties and risks, including those related to the COVID‐19 pandemic and set forth in our Media Release in “Forward‐Looking Statements.” 1 Fiscal Year 2022 and 2023 Adjusted Net Income excludes asbestos related expenses and adjustments.
Page 24 James Hardie Q1 FY23 Results CLOSING United Kingdom NSW, Australia Financially Strong We are preparing for all scenarios, and: 1. deliver strong results throughout, AND 2. accelerate and expand our competitive advantages Right Strategy Experienced Management Team
QUESTIONS
APPENDIX
Page 27 James Hardie Q1 FY23 Results BUILDING SUSTAINABLE COMMUNITIES: ENVIRONMENTAL, SOCIAL AND GOVERNANCE 80% of raw materials sourced within 150 miles of manufacturing facilities 75% of employees hired locally 65% of our products are shipped within 500 miles of manufacturing facilities Total Recordable Incident Rate below industry average (TRIR) 1.22 TRIR Environment Zero Harm Communities 1 Intensity measured from a 2019 baseline Further information can be found in our FY22 Sustainability Report 3.8 Industry Average VS Reduction in Scope 1 and Scope 2 greenhouse gas intensity 1 (MT CO2e/$ revenue) in CY21 GOAL: 40% by 2030 21% Reduction in landfill waste intensity 1 (MT/$ revenue) in CY21 GOAL: 50% by 2030 47% Million additional 1 cubic feet of water recycled in CY21 GOAL: 20M cubic feet by 20303.87
Page 28 James Hardie Q1 FY23 Results DRIVING A HIGHER VALUE PRODUCT MIX – AVERAGE NET SALES PRICE 718 725 745 814 893 500 600 700 800 900 1000 FY19 FY20 FY21 FY22 Q1 FY23 U S$ p er M SF North America Average Net Sales Price 306 311 312 342 378 200 250 300 350 400 FY19 FY20 FY21 FY22 Q1 FY23 € pe r M SF Europe Average Net Sales Price 992 1,027 1,056 1,111 1,211 700 800 900 1,000 1,100 1,200 1,300 FY19 FY20 FY21 FY22 Q1 FY23 A$ p er M SF APAC Average Net Sales Price
Page 29 James Hardie Q1 FY23 Results GENERAL CORPORATE COSTS • Q1 corporate costs down 33% versus pcp primarily due to lower stock compensation expense • Stock compensation expense decreased US$11 million, primarily due to the decrease in share price during the quarter • Q1 R&D costs flat versus pcp • Customer Driven Innovation remains a core strategic initiative to drive organic profitable growth RESEARCH & DEVELOPMENT 35.5 23.7 0 20 40 60 Q1 FY22 Q1 FY23 U S$ m ill io ns 8.4 8.4 0 5 10 15 Q1 FY22 Q1 FY23 U S$ m ill io ns
Page 30 James Hardie Q1 FY23 Results 1 OPERATING CASH FLOW CAPITAL EXPENDITURES • Capacity Expansion in the quarter included • Land purchased in Melbourne, Australia • Significant progress in Prattville Trim capability • Quarterly operating cash flow declined 17% vs pcp • Working capital increased by US$12.6m, primary due to higher inventory levels • Asbestos claims paid of US$28.6 million O pe ra tin g Ca sh F lo w U S$ M ill io ns 184.1 153.6 781.8 726.7 0 250 500 750 1000 Q1 FY22 Q1 FY23 Quarterly TTM 29.6 44.1 13.8 130.0 43.4 174.1 0 50 100 150 200 Q1 FY22 Q1 FY23 U S$ M ill io ns Non Capacity Capacity
Page 31 James Hardie Q1 FY23 Results LIQUIDITY PROFILE 2 1 Incremental liquidity of up to US$250 million may be accessed via an accordion feature, which is provided for under the terms of the syndicated RCF agreement, but not credit approved. Do no anticipate accessing accordion feature. 2 Based on exchange rate as of 30 June 2022 3 Leverage ratio is based on bank covenant definition 1.7x 1.0x 0.7x 30 June 2020 30 June 2021 30 Jun 2022 Net Leverage Ratio3 Corporate debt structure • €400 million (US$418.0 million)2 3.625% senior unsecured notes, maturing 2026 (callable since October 2021) • US$400 million 5.00% senior unsecured notesmaturing 2028 (callable in January 2023) • US$600 million unsecured RCF, maturing December 2026 Net leverage and liquidity • 0.73x leverage ratio3 at 30 June 2022 • US$680.1 million of liquidity at 30 June 2022
Page 32 James Hardie Q1 FY23 Results DEPRECIATION AND AMORTIZATION
Page 33 James Hardie Q1 FY23 Results Quarter ended 30 June 2022: • Average claim settlement was 23% below actuarial estimates and 17% below pcp • Number of claims settled were 36% above actuarial expectations and 50% above pcp • Claims received were 11% above actuarial estimates and 12% above pcp • Net cash outflow was 9% below actuarial expectations ASBESTOS CLAIMS DATA 1 Average claim settlement is derived as the total amount paid divided by the number of non‐nil claims
Page 34 James Hardie Q1 FY23 Results 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 Consolidated Financial Statements Financial Measures – GAAP Equivalents This document contains the financial statement line item EBIT, which is considered to be non‐GAAP, but is consistent with the term used by Australian companies. Because we prepare our consolidated financial statements under GAAP, the equivalent GAAP financial Statement line item description used in our consolidated financial statements is Operating income (loss). Definitions EBIT – Earnings before interest and tax EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales Price/Mix – Price/Mix is defined as the percentage growth in revenue attributable to price increases and shift in mix of products sold. Price/Mix is calculated as the Net Sales growth percentage less the volume growth percentage. Sales Volume 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 Non‐financial Terms AFFA – Amended and Restated Final Funding Agreement AICF – Asbestos Injuries Compensation Fund Ltd NON‐GAAP FINANCIAL MEASURES
Page 35 James Hardie Q1 FY23 Results NON‐GAAP FINANCIAL MEASURES Adjusted EBIT and Adjusted EBITDA US$ Millions Q1'23 Q1'22 EBIT 221.3$ 183.0$ Asbestos: Asbestos adjustments gain (13.2) (2.8) AICF SG&A expenses 0.3 0.3 Adjusted EBIT 208.4$ 180.5$ Net sales 1,000.9 843.3 Adjusted EBIT margin 20.8% 21.4% Depreciation and amortization 40.5 38.4 Adjusted EBITDA 248.9$ 218.9$ Adjusted EBITDA Margin 24.9% 26.0% Three Months Ended 30 June US$ Millions Q1'23 Q1'22 North America Fiber Cement Segment EBIT 191.8$ 169.3$ North America Fiber Cement Segment net sales 740.1 577.1 North America Fiber Cement Segment EBIT margin 25.9% 29.3% Depreciation and amortization 30.0 26.4 North America Fiber Cement Segment EBITDA 221.8$ 195.7$ North America Fiber Cement Segment EBITDA Margin 30.0% 33.9% North America Fiber Cement Segment EBIT and EBITDA Three Months Ended 30 June
Page 36 James Hardie Q1 FY23 Results NON‐GAAP FINANCIAL MEASURES US$ Millions Q1'23 Q1'22 Europe Building Products Segment EBIT 12.1$ 16.3$ Europe Building Products Segment net sales 118.0 124.4 Europe Building Products Segment Adjusted EBIT margin 10.3% 13.1% Depreciation and amortization 6.6 7.6 Europe Building Products Segment Adjusted EBITDA 18.7$ 23.9$ Europe Building Products Segment Adjusted EBITDA Margin 15.9% 19.2% Three Months Ended 30 June Europe Building Products Segment EBIT and EBITDA US$ Millions Q1'23 Q1'22 Asia Pacific Fiber Cement Segment EBIT 36.6$ 38.8$ Asia Pacific Fiber Cement Segment net sales 142.8 141.8 Asia Pacific Fiber Cement Segment EBIT margin 25.6% 27.4% Depreciation and amortization 3.1 3.6 Asia Pacific Fiber Cement Segment EBITDA 39.7$ 42.4$ Asia Pacific Fiber Cement Segment EBITDA Margin 27.8% 29.9% Asia Pacific Fiber Cement Segment EBIT and EBITDA Three Months Ended 30 June
Page 37 James Hardie Q1 FY23 Results NON‐GAAP FINANCIAL MEASURES 1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments US$ Millions Q1'23 Q1'22 Interest, net 8.8$ 10.1$ AICF interest income, net (0.2) (0.1) Adjusted interest, net 9.0$ 10.2$ Adjusted interest, net Three Months Ended 30 June Adjusted net income US$ Millions Q1'23 Q1'22 Net income 163.1$ 121.4$ Asbestos: Asbestos adjustments gain (13.2) (2.8) AICF SG&A expenses 0.3 0.3 AICF interest income, net (0.2) (0.1) Tax adjustments1 4.3 15.4 Adjusted net income 154.3$ 134.2$ Three Months Ended 30 June
Page 38 James Hardie Q1 FY23 Results NON‐GAAP FINANCIAL MEASURES 1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments Adjusted effective tax rate US$ Millions Q1 FY23 Q1 FY22 Income before income taxes 212.3$ 172.7$ Asbestos: Asbestos adjustments gain (13.2) (2.8) AICF SG&A expenses 0.3 0.3 AICF interest income, net (0.2) (0.1) Adjusted income before income taxes 199.2$ 170.1$ Income tax expense 49.2 51.3 Tax adjustments1 (4.3) (15.4) Adjusted income tax expense 44.9$ 35.9$ Effective tax rate 23.2% 29.7% Adjusted effective tax rate 22.5% 21.1% Three Months Ended 30 June
Q1 FY23 MANAGEMENT PRESENTATION 16 August 2022
Exhibit 99.6
James Hardie Industries plc
Condensed Consolidated Financial Statements
as of and for the Three Months Ended 30 June 2022
F-1
James Hardie Industries plc
Index
| Page | |||||
F-2
James Hardie Industries plc
Condensed Consolidated Balance Sheets
| (Millions of US dollars) | (Unaudited) 30 June 2022 | 31 March 2022 | |||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 137.3 | $ | 125.0 | |||||||
| Restricted cash and cash equivalents | 5.0 | 5.0 | |||||||||
| Restricted cash and cash equivalents - Asbestos | 67.3 | 141.9 | |||||||||
| Restricted short-term investments - Asbestos | 69.0 | 119.7 | |||||||||
| Accounts and other receivables, net | 371.8 | 398.4 | |||||||||
| Inventories | 297.9 | 279.7 | |||||||||
| Prepaid expenses and other current assets | 66.9 | 43.2 | |||||||||
| Insurance receivable - Asbestos | 7.3 | 7.9 | |||||||||
| Workers’ compensation - Asbestos | 2.9 | 3.2 | |||||||||
| Total current assets | 1,025.4 | 1,124.0 | |||||||||
| Property, plant and equipment, net | 1,564.7 | 1,457.0 | |||||||||
| Operating lease right-of-use-assets | 64.2 | 57.8 | |||||||||
| Finance lease right-of-use-assets | 2.3 | 2.3 | |||||||||
| Goodwill | 186.9 | 199.5 | |||||||||
| Intangible assets, net | 152.0 | 162.8 | |||||||||
| Restricted long-term investments - Asbestos | 78.6 | — | |||||||||
| Insurance receivable - Asbestos | 33.4 | 37.8 | |||||||||
| Workers’ compensation - Asbestos | 17.1 | 18.6 | |||||||||
| Deferred income taxes | 789.5 | 819.2 | |||||||||
| Deferred income taxes - Asbestos | 323.2 | 360.1 | |||||||||
| Other assets | 3.7 | 4.1 | |||||||||
| Total assets | $ | 4,241.0 | $ | 4,243.2 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 477.3 | $ | 458.0 | |||||||
| Accrued payroll and employee benefits | 82.5 | 116.6 | |||||||||
| Operating lease liabilities | 14.0 | 12.5 | |||||||||
| Finance lease liabilities | 1.2 | 1.1 | |||||||||
| Accrued product warranties | 6.0 | 6.7 | |||||||||
| Income taxes payable | 20.6 | 9.5 | |||||||||
| Asbestos liability | 122.5 | 132.9 | |||||||||
| Workers’ compensation - Asbestos | 2.9 | 3.2 | |||||||||
| Dividends payable | 129.0 | — | |||||||||
| Other liabilities | 44.1 | 29.4 | |||||||||
| Total current liabilities | 900.1 | 769.9 | |||||||||
| Long-term debt | 859.4 | 877.3 | |||||||||
| Deferred income taxes | 86.0 | 86.9 | |||||||||
| Operating lease liabilities | 66.4 | 63.1 | |||||||||
| Finance lease liabilities | 1.3 | 1.5 | |||||||||
| Accrued product warranties | 30.8 | 31.0 | |||||||||
| Income taxes payable | 2.3 | 2.3 | |||||||||
| Asbestos liability | 903.9 | 1,010.8 | |||||||||
| Workers’ compensation - Asbestos | 17.1 | 18.6 | |||||||||
| Other liabilities | 45.4 | 48.9 | |||||||||
| Total liabilities | 2,912.7 | 2,910.3 | |||||||||
| Commitments and contingencies (Note 8) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Common stock, Euro 0.59 par value, 2.0 billion shares authorized; 445,431,671 shares issued and outstanding at 30 June 2022 and 445,348,933 shares issued and outstanding at 31 March 2022 | 232.2 | 232.1 | |||||||||
| Additional paid-in capital | 230.9 | 230.4 | |||||||||
| Retained earnings | 921.9 | 892.4 | |||||||||
| Accumulated other comprehensive loss | (56.7) | (22.0) | |||||||||
| Total shareholders’ equity | 1,328.3 | 1,332.9 | |||||||||
| Total liabilities and shareholders’ equity | $ | 4,241.0 | $ | 4,243.2 | |||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-3
James Hardie Industries plc
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)
| Three Months Ended 30 June | |||||||||||||||||
| (Millions of US dollars, except per share data) | 2022 | 2021 | |||||||||||||||
| Net sales | $ | 1,000.9 | $ | 843.3 | |||||||||||||
| Cost of goods sold | 661.8 | 535.5 | |||||||||||||||
| Gross profit | 339.1 | 307.8 | |||||||||||||||
| Selling, general and administrative expenses | 121.6 | 119.1 | |||||||||||||||
| Research and development expenses | 9.4 | 8.5 | |||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | |||||||||||||||
| Operating income | 221.3 | 183.0 | |||||||||||||||
| Interest, net | 8.8 | 10.1 | |||||||||||||||
| Other expense | 0.2 | 0.2 | |||||||||||||||
| Income before income taxes | 212.3 | 172.7 | |||||||||||||||
| Income tax expense | 49.2 | 51.3 | |||||||||||||||
| Net income | $ | 163.1 | $ | 121.4 | |||||||||||||
| Income per share: | |||||||||||||||||
| Basic | $ | 0.37 | $ | 0.27 | |||||||||||||
| Diluted | $ | 0.37 | $ | 0.27 | |||||||||||||
| Weighted average common shares outstanding (Millions): | |||||||||||||||||
| Basic | 445.4 | 444.3 | |||||||||||||||
| Diluted | 445.9 | 445.7 | |||||||||||||||
| Comprehensive income, net of tax: | |||||||||||||||||
| Net income | $ | 163.1 | $ | 121.4 | |||||||||||||
| Currency translation adjustments | (34.7) | (0.4) | |||||||||||||||
| Comprehensive income | $ | 128.4 | $ | 121.0 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4
James Hardie Industries plc
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended 30 June | |||||||||||||||||
| (Millions of US dollars) | 2022 | 2021 | |||||||||||||||
| Cash Flows From Operating Activities | |||||||||||||||||
| Net income | $ | 163.1 | $ | 121.4 | |||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | 40.5 | 38.4 | |||||||||||||||
| Lease expense | 6.3 | 5.0 | |||||||||||||||
| Deferred income taxes | 26.5 | 28.2 | |||||||||||||||
| Stock-based compensation | 1.4 | 4.8 | |||||||||||||||
| Asbestos adjustments loss (gain) | (13.2) | (2.8) | |||||||||||||||
| Excess tax benefits from share-based awards | — | (0.3) | |||||||||||||||
| Other, net | 2.2 | 5.7 | |||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts and other receivables | 13.8 | (4.0) | |||||||||||||||
| Inventories | (26.0) | (8.1) | |||||||||||||||
| Lease assets and liabilities, net | (6.4) | (4.7) | |||||||||||||||
| Prepaid expenses and other assets | (23.4) | (2.7) | |||||||||||||||
| Insurance receivable - Asbestos | 1.4 | 1.7 | |||||||||||||||
| Accounts payable and accrued liabilities | (0.4) | 42.6 | |||||||||||||||
| Claims and handling costs paid - Asbestos | (28.6) | (23.5) | |||||||||||||||
| Income taxes payable | 10.4 | 9.7 | |||||||||||||||
| Other accrued liabilities | (14.0) | (27.3) | |||||||||||||||
| Net cash provided by operating activities | $ | 153.6 | $ | 184.1 | |||||||||||||
| Cash Flows From Investing Activities | |||||||||||||||||
| Purchases of property, plant and equipment | $ | (174.1) | $ | (43.4) | |||||||||||||
| Capitalized interest | (0.8) | (0.5) | |||||||||||||||
| Purchase of restricted investments - Asbestos | (40.9) | — | |||||||||||||||
| Net cash used in investing activities | $ | (215.8) | $ | (43.9) | |||||||||||||
| Cash Flows From Financing Activities | |||||||||||||||||
| Proceeds from credit facilities | $ | 40.0 | $ | 110.0 | |||||||||||||
| Repayments of credit facilities | (30.0) | (40.0) | |||||||||||||||
| Proceeds from issuance of shares | — | 0.1 | |||||||||||||||
| Repayment of finance lease obligations and borrowings | (0.3) | (0.2) | |||||||||||||||
| Dividends paid | — | (309.9) | |||||||||||||||
| Taxes paid related to net share settlement of equity awards | (0.8) | — | |||||||||||||||
| Net cash provided by (used in) financing activities | $ | 8.9 | $ | (240.0) | |||||||||||||
| Effects of exchange rate changes on cash and cash equivalents, restricted cash and restricted cash - Asbestos | $ | (9.0) | $ | (0.4) | |||||||||||||
| Net decrease in cash and cash equivalents, restricted cash and restricted cash - Asbestos | (62.3) | (100.2) | |||||||||||||||
| Cash and cash equivalents, restricted cash and restricted cash - Asbestos at beginning of period | 271.9 | 318.4 | |||||||||||||||
| Cash and cash equivalents, restricted cash and restricted cash - Asbestos at end of period | $ | 209.6 | $ | 218.2 | |||||||||||||
| Non-Cash Investing and Financing Activities | |||||||||||||||||
| Capital expenditures incurred but not yet paid | $ | 42.1 | $ | 15.3 | |||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-5
James Hardie Industries plc
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
| Three Months Ended 30 June 2022 | |||||||||||||||||||||||||||||
| (Millions of US dollars) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||
| Balances as of 31 March 2022 | $ | 232.1 | $ | 230.4 | $ | 892.4 | $ | (22.0) | $ | 1,332.9 | |||||||||||||||||||
| Net income | — | — | 163.1 | — | 163.1 | ||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (34.7) | (34.7) | ||||||||||||||||||||||||
| Stock-based compensation | 0.1 | 0.5 | — | — | 0.6 | ||||||||||||||||||||||||
| Dividends declared | — | — | (133.6) | — | (133.6) | ||||||||||||||||||||||||
| Balances as of 30 June 2022 | $ | 232.2 | $ | 230.9 | $ | 921.9 | $ | (56.7) | $ | 1,328.3 | |||||||||||||||||||
| Three Months Ended 30 June 2021 | |||||||||||||||||||||||||||||
| (Millions of US dollars) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total | ||||||||||||||||||||||||
| Balances as of 31 March 2021 | $ | 231.4 | $ | 224.6 | $ | 611.4 | $ | (6.6) | $ | 1,060.8 | |||||||||||||||||||
| Net income | — | — | 121.4 | — | 121.4 | ||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (0.4) | (0.4) | ||||||||||||||||||||||||
| Stock-based compensation | 0.1 | 4.7 | — | — | 4.8 | ||||||||||||||||||||||||
| Issuance of ordinary shares | — | 0.1 | — | — | 0.1 | ||||||||||||||||||||||||
| Balances as of 30 June 2021 | $ | 231.5 | $ | 229.4 | $ | 732.8 | $ | (7.0) | $ | 1,186.7 | |||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-6
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements
1. Organization and Significant Accounting Policies
Nature of Operations
James Hardie Industries plc ("JHI plc") manufactures and sells fiber cement, fiber gypsum and cement-bonded building products for interior and exterior building construction applications, primarily in the United States, Australia, Europe, New Zealand and the Philippines.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles ("GAAP") for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. Interim financial results are not necessarily indicative of results anticipated for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, included in the Company’s Annual Report on Form 20-F for the fiscal year ended 31 March 2022 from which the prior year balance sheet information herein was derived. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense, and related disclosures. Actual results could differ from those estimates.
The condensed consolidated financial statements represent the financial position, results of operations and cash flows of JHI plc and its wholly-owned subsidiaries and variable interest entity (“VIE”). Unless the context indicates otherwise, JHI plc and its direct and indirect wholly-owned subsidiaries and VIE (as of the time relevant to the applicable reference) are collectively referred to as “James Hardie”, the “James Hardie Group” or the “Company”. All intercompany balances and transactions have been eliminated in consolidation. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of the results for the interim periods presented.
The Company has recorded on its condensed consolidated balance sheets certain foreign assets and liabilities, including asbestos related assets and liabilities under the terms of the Amended and Restated Final Funding Agreement (“AFFA”), that are denominated in foreign currencies and subject to translation (foreign entities) or remeasurement (Asbestos Injuries Compensation Fund (“AICF”) entity and Euro denominated debt) into US dollars at each reporting date. Unless otherwise noted, the Company converts foreign currency denominated assets and liabilities into US dollars at the current spot rate at the end of the reporting period; while revenues and expenses are converted using an average exchange rate for the period. The Company records gains and losses on its Euro denominated debt which are economically offset by foreign exchange gains and losses on loans between subsidiaries, resulting in a net immaterial translation gain or loss which is recorded in the Selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.
Summary of Significant Accounting Policies
During the three months ended 30 June 2022, the Company reclassified its Restricted Short-Term Investments - Asbestos from available for sale to held to maturity ("HTM") due to AICF's ability and intent to hold these securities to maturity. At the time of the reclassification, the fair value of the investments were carried at fair value. Subsequently, these investments are carried at amortized cost.
Other than noted above, there were no changes to our significant accounting policies as described in our Annual Report on Form 20-F for the fiscal year ended 31 March 2022.
F-7
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
Earnings Per Share
Basic earnings per share ("EPS") is calculated using net income divided by the weighted average number of common shares outstanding during the period. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares calculated using the treasury method that would have been outstanding if the dilutive potential common shares, such as restricted stock units ("RSUs"), had been issued.
Basic and dilutive common shares outstanding used in determining net income per share are as follows:
| Three Months Ended 30 June | ||||||||||||||
| (Millions of shares) | 2022 | 2021 | ||||||||||||
| Basic common shares outstanding | 445.4 | 444.3 | ||||||||||||
| Dilutive effect of stock awards | 0.5 | 1.4 | ||||||||||||
| Diluted common shares outstanding | 445.9 | 445.7 | ||||||||||||
There were no potential common shares which would be considered anti-dilutive for the three months ended 30 June 2022 and 2021.
Potential common shares of 0.3 million and 0.7 million for the three months ended 30 June 2022 and 2021, respectively, have been excluded from the calculation of diluted common shares outstanding as they are considered contingent shares which are not expected to vest.
2. Revenues
The following represents the Company's disaggregated revenues:
| Three Months Ended 30 June 2022 | |||||||||||||||||||||||
| (Millions of US dollars) | North America Fiber Cement | Asia Pacific Fiber Cement | Europe Building Products | Consolidated | |||||||||||||||||||
| Fiber cement revenues | $ | 740.1 | $ | 142.8 | $ | 18.6 | $ | 901.5 | |||||||||||||||
| Fiber gypsum revenues | — | — | 99.4 | 99.4 | |||||||||||||||||||
| Total revenues | $ | 740.1 | $ | 142.8 | $ | 118.0 | $ | 1,000.9 | |||||||||||||||
| Three Months Ended 30 June 2021 | |||||||||||||||||||||||
| (Millions of US dollars) | North America Fiber Cement | Asia Pacific Fiber Cement | Europe Building Products | Consolidated | |||||||||||||||||||
| Fiber cement revenues | $ | 577.1 | $ | 141.8 | $ | 20.7 | $ | 739.6 | |||||||||||||||
| Fiber gypsum revenues | — | — | 103.7 | 103.7 | |||||||||||||||||||
| Total revenues | $ | 577.1 | $ | 141.8 | $ | 124.4 | $ | 843.3 | |||||||||||||||
The process by which the Company recognizes revenues is similar across each of the Company's reportable segments. Fiber cement and fiber gypsum revenues are primarily generated from the sale of siding and various boards used in external and internal applications, as well as accessories. Fiber gypsum revenues also includes the sale of cement-bonded boards in the Europe Building Products segment.
F-8
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
3. Cash and Cash Equivalents, Restricted Cash and Restricted Cash - Asbestos
The following table provides a reconciliation of Cash and cash equivalents, Restricted cash and Restricted cash - Asbestos reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:
| 30 June | 31 March | ||||||||||
| (Millions of US dollars) | 2022 | 2022 | |||||||||
| Cash and cash equivalents | $ | 137.3 | $ | 125.0 | |||||||
| Restricted cash | 5.0 | 5.0 | |||||||||
| Restricted cash - Asbestos | 67.3 | 141.9 | |||||||||
| Total cash and cash equivalents, restricted cash and restricted cash - Asbestos | $ | 209.6 | $ | 271.9 | |||||||
Restricted cash relates to an insurance policy which restricts the cash from general corporate purposes.
Restricted cash - Asbestos is restricted to the settlement of asbestos claims and for the payment of the operating costs of AICF.
4. Inventories
Inventories consist of the following components:
| 30 June | 31 March | ||||||||||
| (Millions of US dollars) | 2022 | 2022 | |||||||||
| Finished goods | $ | 191.8 | $ | 187.3 | |||||||
| Work-in-process | 20.1 | 16.2 | |||||||||
| Raw materials and supplies | 94.1 | 82.1 | |||||||||
| Provision for obsolete finished goods and raw materials | (8.1) | (5.9) | |||||||||
| Total inventories | $ | 297.9 | $ | 279.7 | |||||||
5. Long-Term Debt
| 30 June | 31 March | ||||||||||
| (Millions of US dollars) | 2022 | 2022 | |||||||||
| Senior unsecured notes: | |||||||||||
Principal amount 3.625% notes due 2026 (€400.0 million) | $ | 418.0 | $ | 446.4 | |||||||
Principal amount 5.000% notes due 2028 | 400.0 | 400.0 | |||||||||
| Total | 818.0 | 846.4 | |||||||||
| Unsecured revolving credit facility | 50.0 | 40.0 | |||||||||
| Unamortized debt issuance costs: | (8.6) | (9.1) | |||||||||
| Total Long-term debt | $ | 859.4 | $ | 877.3 | |||||||
| Weighted average interest rate of Long-term debt | 4.2 | % | 4.2 | % | |||||||
| Weighted average term of available Long-term debt | 4.7 years | 5.0 years | |||||||||
Fair value of Senior unsecured notes (Level 1) | $ | 744.7 | $ | 845.1 | |||||||
F-9
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
As of 30 June 2022, the Company had a total borrowing base capacity under the revolving credit facility of US$600.0 million with outstanding borrowings of US$50.0 million, and US$7.2 million of issued but undrawn letters of credit and bank guarantees. These letters of credit and bank guarantees relate to various operational matters including insurance, performance bonds and other items, leaving the Company with US$542.8 million of available borrowing capacity under the revolving credit facility.
At 30 June 2022, the Company was in compliance with all of its covenants contained in the senior unsecured notes and the unsecured revolving credit facility agreement.
6. Asbestos
In February 2007, the Company's shareholders approved the AFFA, an agreement pursuant to which the Company provides long-term funding to AICF.
Asbestos Adjustments Loss (Gain)
The Asbestos adjustments loss (gain) included in the condensed consolidated statements of operations and comprehensive income comprise the following:
| Three Months Ended 30 June | |||||||||||
| (Millions of US dollars) | 2022 | 2021 | |||||||||
| Effect of foreign exchange on Asbestos net liabilities | $ | (34.0) | $ | (5.7) | |||||||
| Loss on foreign currency forward contracts | 20.4 | 2.9 | |||||||||
| Other | 0.4 | — | |||||||||
| Asbestos adjustments loss (gain) | $ | (13.2) | $ | (2.8) | |||||||
Claims Data
The following table shows the activity related to the numbers of open claims, new claims and closed claims during each of the past five years and the average settlement per settled claim and case closed:
| Three Months | ||||||||||||||||||||
| Ended | For the Years Ended 31 March | |||||||||||||||||||
| 30 June 2022 | 2022 | 2021 | 2020 | 2019 | 2018 | |||||||||||||||
| Number of open claims at beginning of period | 365 | 360 | 393 | 332 | 336 | 352 | ||||||||||||||
| Number of new claims | ||||||||||||||||||||
| Direct claims | 103 | 411 | 392 | 449 | 430 | 422 | ||||||||||||||
| Cross claims | 48 | 144 | 153 | 208 | 138 | 140 | ||||||||||||||
| Number of closed claims | 183 | 550 | 578 | 596 | 572 | 578 | ||||||||||||||
| Number of open claims at end of period | 333 | 365 | 360 | 393 | 332 | 336 | ||||||||||||||
| Average settlement amount per settled claim | A$256,000 | A$314,000 | A$248,000 | A$277,000 | A$262,000 | A$253,000 | ||||||||||||||
Average settlement amount per case closed 1 | A$225,000 | A$282,000 | A$225,000 | A$245,000 | A$234,000 | A$217,000 | ||||||||||||||
| Average settlement amount per settled claim | US$183,000 | US$232,000 | US$178,000 | US$189,000 | US$191,000 | US$196,000 | ||||||||||||||
Average settlement amount per case closed 1 | US$161,000 | US$208,000 | US$162,000 | US$167,000 | US$171,000 | US$168,000 | ||||||||||||||
1 The average settlement amount per case closed includes nil settlements. | ||||||||||||||||||||
Under the terms of the AFFA, the Company has rights of access to actuarial information produced for AICF by the actuary appointed by AICF, which is currently KPMG Actuarial. The Company’s disclosures with respect to claims statistics are subject to it obtaining such information, however, the AFFA does not
F-10
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
provide the Company an express right to audit or otherwise require independent verification of such information or the methodologies to be adopted by the approved actuary. As such, the Company relies on the accuracy and completeness of the information provided by AICF to the approved actuary and the resulting information and analysis of the approved actuary when making disclosures with respect to claims statistics.
The following is a detailed rollforward of the Net Unfunded AFFA liability, net of tax, for the three months ended 30 June 2022:
| (Millions of US dollars) | Asbestos Liability | Insurance Receivables | Restricted Cash and Investments | Other Assets and Liabilities | Net Unfunded AFFA Liability | Deferred Tax Assets | Income Tax Payable | Net Unfunded AFFA Liability, net of tax | |||||||||||||||||||||||||||||||||||||||
| Opening Balance - 31 March 2022 | $ | (1,143.7) | $ | 45.7 | $ | 261.6 | $ | (1.1) | $ | (837.5) | $ | 360.1 | $ | 43.9 | $ | (433.5) | |||||||||||||||||||||||||||||||
Asbestos claims paid1 | 28.4 | — | (28.4) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| AICF claims-handling costs incurred (paid) | 0.2 | — | (0.2) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| AICF operating costs paid - non claims-handling | — | — | (0.3) | — | (0.3) | — | — | (0.3) | |||||||||||||||||||||||||||||||||||||||
| Insurance recoveries | — | (1.4) | 1.4 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Movement in income tax payable | — | — | — | — | — | (9.0) | (31.4) | (40.4) | |||||||||||||||||||||||||||||||||||||||
| Other movements | — | — | 0.3 | (0.3) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Effect of foreign exchange | 88.7 | (3.6) | (19.5) | 0.1 | 65.7 | (27.9) | (3.8) | 34.0 | |||||||||||||||||||||||||||||||||||||||
| Closing Balance - 30 June 2022 | $ | (1,026.4) | $ | 40.7 | $ | 214.9 | $ | (1.3) | $ | (772.1) | $ | 323.2 | $ | 8.7 | $ | (440.2) | |||||||||||||||||||||||||||||||
___________
1Claims paid of US$28.4 million reflects A$39.7 million converted at the average exchange rate for the period based on the assumption that these transactions occurred evenly throughout the period.
AICF Funding
During fiscal year 2023, the Company will contribute A$160.4 million to AICF in quarterly installments. The first payment of A$39.7 million was made on 1 July 2022.
For the three months ended 30 June 2022, the Company did not provide financial or other support to AICF that it was not previously contractually required to provide.
Restricted Investments
AICF invests its excess cash in time deposits, which are classified as HTM investments. The following table represents the investments entered into as of 30 June 2022:
| Date Invested | Maturity Date | Interest Rate | A$ Millions | |||||||||||||||||
| April 2022 | 5 April 2024 | 2.75% | 54.0 | |||||||||||||||||
| January 2022 | 25 January 2024 | 1.41% | 30.0 | |||||||||||||||||
| January 2022 | 25 January 2023 | 0.79% | 100.0 | |||||||||||||||||
| October 2021 | 6 October 2023 | 0.60% | 30.0 | |||||||||||||||||
F-11
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
7. Derivative Instruments
The Company uses derivatives for risk management purposes and does not engage in speculative activity. A risk management objective for the Company is to mitigate interest rate risk associated with the Company’s external credit facilities and foreign currency risk primarily with respect to forecasted transactions denominated in foreign currencies. The determination of whether the Company enters into a derivative transaction to achieve these risk management objectives depends on a number of factors, including an evaluation of the extent to which derivative instruments will achieve such risk management objectives of the Company.
Foreign Currency Forward Contracts
The Company’s foreign currency forward contracts are valued using models that maximize the use of market observable inputs including interest rate curves and both forward and spot prices for currencies and are categorized as Level 2 within the fair value hierarchy.
The following table sets forth the total outstanding notional amount and the fair value of the Company’s foreign currency forward contracts:
| Fair Value as of | |||||||||||||||||||||||||||||||||||
| (Millions of US dollars) | Notional Amount | 30 June 2022 | 31 March 2022 | ||||||||||||||||||||||||||||||||
| Derivatives not accounted for as hedges | 30 June 2022 | 31 March 2022 | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | 569.0 | $ | 251.0 | $ | 0.5 | $ | 25.4 | $ | 2.0 | $ | 1.9 | |||||||||||||||||||||||
The following table sets forth the gain and loss on the Company’s foreign currency forward contracts recorded in the Company's condensed consolidated statements of operations and comprehensive income as follows:
| Three Months Ended 30 June | |||||||||||
| (Millions of US dollars) | 2022 | 2021 | |||||||||
| Asbestos adjustments loss | $ | 20.4 | $ | 2.9 | |||||||
| Selling, general and administrative expenses | 4.6 | (5.6) | |||||||||
| Total loss (gain) | $ | 25.0 | $ | (2.7) | |||||||
F-12
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
8. Commitments and Contingencies
Legal Matters
The Company is involved from time to time in various legal proceedings and administrative actions related to the normal conduct of its business, including general liability claims, putative class action lawsuits and litigation concerning its products.
Although it is impossible to predict the outcome of any pending legal proceeding, management believes that such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows, except as they relate to asbestos and New Zealand weathertightness claims as described in these condensed consolidated financial statements.
New Zealand Weathertightness Claims
Since fiscal year 2002, the Company’s New Zealand subsidiaries have been joined in a number of weathertightness claims in New Zealand that relate to residential buildings (single dwellings and apartment complexes) and a small number of non-residential buildings, primarily constructed from 1998 to 2004. The claims often involve multiple parties and allege that losses were incurred due to excessive moisture penetration of the buildings’ structures. The claims typically include allegations of poor building design, inadequate certification of plans, inadequate construction review and compliance certification and deficient work by sub-contractors.
Historically, the Company’s New Zealand subsidiaries have been joined to these claims as one of several co-defendants, including local government entities responsible for enforcing building codes and practices, resulting in the Company’s New Zealand subsidiaries becoming liable for only a portion of each claim. In addition, the Company’s New Zealand subsidiaries have had access to third-party recoveries to defray a portion of the costs incurred in resolving such claims.
Currently pending are two claims filed on behalf of multiple defendants in 2015 against the Company and/or its subsidiaries as the sole defendants, each of which alleges that the New Zealand subsidiaries’ products were inherently defective. The Company believes it has substantial factual and legal defenses to these claims and is defending the claims vigorously.
Cridge, et al. (Case Nos. CIV-2015-485-594 and CIV-2015-485-773), In the High Court of New Zealand, Wellington Registry (hereinafter the “Cridge litigation”). From August to December 2020, the trial of phase one of the Cridge litigation was held in Wellington, New Zealand solely to determine whether the Company’s New Zealand subsidiaries had a duty to the plaintiffs and breached that duty. In August 2021, the Wellington High Court issued its decision finding in favor of the Company on all claims (the “Cridge Decision”). In September 2021, plaintiffs filed a notice of appeal of the trial court’s decision, and subsequently the appellate court set an appeal hearing date in August 2022 scheduled for 10-days. The Company anticipates the appellate court to issue its decision no sooner than December 2022. As of 30 June 2022, the Company has not recorded a reserve related to the Cridge litigation as the chance of loss remains not probable following the Cridge Decision.
Waitakere, et al. (Case No. CIV-2015-404-3080), In the High Court of New Zealand, Auckland Registry (hereinafter the “Waitakere litigation”). The trial in the Waitakere litigation is currently not scheduled to begin until May 2023 in Auckland, New Zealand. As of 30 June 2022, the Company has not recorded a reserve related to the Waitakere litigation as the chance of loss is not probable and the amount of loss, if any, cannot be reasonably estimated.
F-13
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
The resolution of one or more of the litigation matters by way of a court decision or settlement has the potential to impact the accounting treatment regarding the probability of a potential loss and the Company’s ability to reasonably estimate a reserve with regards to the other litigation matters discussed above. Furthermore, an adverse judgement in one or more of these litigation matters could have a material adverse impact on our consolidated financial position, results of operations or cash flows.
Environmental
The operations of the Company, like those of other companies engaged in similar businesses, are subject to a number of laws and regulations on air, soil and water quality, waste handling and disposal. The Company’s policy is to accrue for environmental costs when it is determined that it is probable that an obligation exists and the amount can be reasonably estimated.
9. Income Taxes
Income taxes payable represents taxes currently payable which are computed at statutory income tax rates applicable to taxable income derived in each jurisdiction in which the Company conducts business. During the three months ended 30 June 2022, the Company paid taxes, net of refunds, of US$4.7 million.
Income tax expense differs from the statutory rate primarily due to the Company’s mix of pre-tax income by jurisdiction, foreign taxes on domestic income and foreign exchange on asbestos.
Deferred income taxes include net operating loss carry-forwards. At 30 June 2022, the Company had tax loss carry-forwards in Australia, New Zealand, Europe and the US of approximately US$63.8 million that are available to offset future taxable income in the respective jurisdiction. The Company establishes a valuation allowance against a deferred tax asset if it is more likely than not that some portion or all of the deferred tax asset will not be realized.
The Australian tax loss carry-forwards primarily result from current and prior year tax deductions for contributions to AICF. James Hardie 117 Pty Limited, the performing subsidiary under the AFFA, is able to claim a tax deduction for its contributions to AICF over a five-year period commencing in the year the contribution is incurred. At 30 June 2022, the Company recognized a tax deduction of US$31.2 million (A$42.2 million) for the current year relating to total contributions to AICF of US$612.9 million (A$884.0 million) incurred in tax years 2019 through 2023.
F-14
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
10. Stock-Based Compensation
Total stock-based compensation expense consists of the following:
| Three Months Ended 30 June | |||||||||||||||||
| (Millions of US dollars) | 2022 | 2021 | |||||||||||||||
| Liability Awards | $ | (1.7) | $ | 5.6 | |||||||||||||
| Equity Awards | 1.4 | 4.8 | |||||||||||||||
| Total stock-based compensation (income) expense | $ | (0.3) | $ | 10.4 | |||||||||||||
As of 30 June 2022, the unrecorded future stock-based compensation expense related to outstanding equity awards was US$16.6 million and will be recognized over an estimated weighted average amortization period of 1.6 years.
11. Segment Information
The Company reports its operating segment information in the format that the operating segment information is available to and evaluated by the Chief Operating Decision Maker. The North America Fiber Cement segment manufactures fiber cement interior linings, exterior siding products and related accessories in the United States; these products are sold in the United States and Canada. The Asia Pacific Fiber Cement segment includes all fiber cement products manufactured in Australia and the Philippines, and sold in Australia, New Zealand, Asia, the Middle East and various Pacific Islands. The Europe Building Products segment includes fiber gypsum and cement-bonded boards manufactured in Europe and fiber cement product manufactured in the United States that is sold in Europe. The Research and Development segment represents the cost incurred by the research and development centers. General Corporate primarily consist of Asbestos adjustments loss (gain), officer and employee compensation and related benefits, professional and legal fees, administrative costs and rental expense on the Company’s corporate offices. The Company does not report net interest expense for each segment as the segments are not held directly accountable for interest expense.
F-15
James Hardie Industries plc
Notes to Condensed Consolidated Financial Statements (continued)
Operating Segments
The following is the Company’s operating segment information:
| Net Sales Three Months Ended 30 June | ||||||||||||||
| (Millions of US dollars) | 2022 | 2021 | ||||||||||||
| North America Fiber Cement | $ | 740.1 | $ | 577.1 | ||||||||||
| Asia Pacific Fiber Cement | 142.8 | 141.8 | ||||||||||||
| Europe Building Products | 118.0 | 124.4 | ||||||||||||
| Worldwide total | $ | 1,000.9 | $ | 843.3 | ||||||||||
| Operating Income Three Months Ended 30 June | ||||||||||||||
| (Millions of US dollars) | 2022 | 2021 | ||||||||||||
| North America Fiber Cement | $ | 191.8 | $ | 169.3 | ||||||||||
| Asia Pacific Fiber Cement | 36.6 | 38.8 | ||||||||||||
| Europe Building Products | 12.1 | 16.3 | ||||||||||||
| Research and Development | (8.4) | (8.4) | ||||||||||||
| Segments total | 232.1 | 216.0 | ||||||||||||
| General Corporate | (10.8) | (33.0) | ||||||||||||
| Total operating income | 221.3 | 183.0 | ||||||||||||
Research and development expenditures are expensed as incurred and are summarized by segment in the following table. For the three months ended 30 June 2022 and 2021, Research and development segment operating income also includes Selling, general and administrative expenses of US$0.6 million and US$1.6 million, respectively.
| Research and Development Expenses | ||||||||||||||
| Three Months Ended 30 June | ||||||||||||||
| (Millions of US dollars) | 2022 | 2021 | ||||||||||||
| North America Fiber Cement | $ | 0.9 | $ | 1.1 | ||||||||||
| Asia Pacific Fiber Cement | 0.4 | 0.4 | ||||||||||||
| Europe Building Products | 0.3 | 0.2 | ||||||||||||
| Research and Development | 7.8 | 6.8 | ||||||||||||
| Worldwide total | $ | 9.4 | $ | 8.5 | ||||||||||
12. Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is comprised of the following at 30 June 2022:
| (Millions of US dollars) | Cash Flow Hedges | Pension Actuarial Loss | Foreign Currency Translation Adjustments | Total | ||||||||||||||||||||||
| Balance at 31 March 2022 | $ | 0.2 | $ | (0.3) | $ | (21.9) | $ | (22.0) | ||||||||||||||||||
| Other comprehensive loss | — | — | (34.7) | (34.7) | ||||||||||||||||||||||
| Balance at 30 June 2022 | $ | 0.2 | $ | (0.3) | $ | (56.6) | $ | (56.7) | ||||||||||||||||||
F-16
EXHIBIT 99.7
Media Release 11 August 2022 Sydney, Australia 10 August 2022 Chicago, USA |  | ||||
James Hardie Industries Announces Chairperson Succession Plan
Ms Anne Lloyd appointed Deputy Chairperson and Successor
Mr Peter-John Davis appointed as a Non-Executive Director of the Board
James Hardie Industries plc (ASX: JHX; NYSE: JHX), the world’s #1 producer and marketer of high-performance fiber cement and fiber gypsum building solutions, is pleased to announce the appointment of Ms Anne Lloyd as successor to Michael Hammes as Chairperson. Ms Lloyd will immediately assume the role of Deputy Chairperson.
Chairman of the Board, Michael Hammes, previously announced his intention to retire, and now plans to retire after the Company’s November 2022 Board meeting and Annual General Meeting. Michael Hammes was elected as an independent non-executive director in February 2007, and he was appointed Chairman of the Board in January 2008.
Commenting on Ms Lloyd’s appointment, Mr Hammes stated, “Having served as Chairman of the James Hardie Board of Directors for over 15 years, it gives me great pleasure to be able to pass on this important role and responsibility to someone the caliber of Anne Lloyd. Anne has been on our Board for over three years and has operated within the industry for several decades. Her knowledge of James Hardie operations, the executive leadership team and the building materials industry make her an excellent choice to be the next Chairperson of James Hardie. Anne and I will work together over these next few months to fully transition the Chairperson responsibilities and expect to complete the succession process in early November 2022.”
Ms Lloyd added, “I am honored and excited to have the opportunity to step into this critical role as Chairperson of the James Hardie Board of Directors. There are big shoes to fill. Mike has done such a great job serving as a steward of this company for the past 15 years. I look forward to leading our Board as we work closely with our strong executive leadership team to help ensure James Hardie drives continued success and value for our shareholders.”
Ms Lloyd, an experienced corporate and finance executive, served as Chief Financial Officer of Martin Marietta Materials, Inc. a leading supplier of aggregates and heavy building materials, for over 12 years from June 2005 until her retirement in August 2017. She joined Martin Marietta in 1998 as Vice President and Controller and was promoted to Chief Accounting Officer in 1999. She was subsequently appointed Treasurer (2006-2013) and promoted to Executive Vice President in 2009. Earlier in her career, Ms Lloyd spent 14 years with Ernst & Young LLP (1984-1998), latterly as a senior manager and client service executive for the natural resources, mining, insurance and healthcare industries.
Additionally, as part of the continued Board of Directors refresh program, James Hardie announced today the appointment of Peter-John (PJ) Davis to the Board of Directors. PJ is based out of Queensland, Australia.
PJ previously served as Chief Operating Officer (COO) of Bunnings Australia & New Zealand. During his 15-year tenure as COO, the division was one of the most profitable of the Wesfarmers Group. With over 40 years’ experience in various retail and trade formats and home improvement industries, PJ commenced his career
| Media Release: James Hardie Industries Announces Chairperson Succession Plan | 1 | ||||
EXHIBIT 99.7
Media Release 11 August 2022 Sydney, Australia 10 August 2022 Chicago, USA | | ||||
on the sales floor and held senior roles in operations, marketing, advertising, and merchandising before moving into general management and leading the development of the highly successful Bunnings Warehouse concept. PJ completed the Advanced Management Program at Harvard Business School in Boston, USA and is the Founding Director of ANRA (Australian National Retailers Association) and Foundation Member of the Australian Institute of Company Directors.
Commenting on Mr. Davis’ appointment, Ms Lloyd noted, “We are pleased to have PJ join our Board. His deep understanding of the retail and trade segments will be an asset to our Board, and we are pleased to once again have an Australian on our Board, as we now have Board representation from all three key geographic regions.”
The Board anticipates it will add two additional Board members in the next six months as it continues the Board refresh process.
Lastly, commenting on the search for a new CEO, Mr. Hammes stated, “We anticipate we will be in a position to announce a CEO appointment in the next thirty days. The search has identified multiple excellent candidates and we are in the final stages of the selection and appointment process.”
Forward-Looking Statements | ||
This Media Release contains forward-looking statements and information that are necessarily subject to risks, uncertainties, and assumptions. Many factors could cause the actual results, performance or achievements of James Hardie to be materially different from those expressed or implied in this release, including, among others, the risks and uncertainties set forth in Section 3 “Risk Factors” in James Hardie’s Annual Report on Form 20-F for the year ended 31 March 2022; changes in general economic, political, governmental and business conditions globally and in the countries in which James Hardie does business; changes in interest rates; changes in inflation rates; changes in exchange rates; the level of construction generally; changes in cement demand and prices; changes in raw material and energy prices; changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. James Hardie assumes no obligation to update or correct the information contained in this Media Release except as required by law.
This media release has been authorized by Mr. Jason Miele, Chief Financial Offer.
END
Media/Press Enquiries:
Brett Clegg
Managing Director, Citadel Magnus
Telephone: +61 487 436 985
Email: bclegg@citadelmagnus.com
| Media Release: James Hardie Industries Announces Chairperson Succession Plan | 2 | ||||
EXHIBIT 99.7
Media Release 11 August 2022 Sydney, Australia 10 August 2022 Chicago, USA | | ||||
Investor/Analyst Enquiries:
James Brennan-Chong
Director of Investor Relations and Market Intelligence
Telephone: +61 2 9638 9205
Email: media@jameshardie.com.au
James Hardie Industries plc is a limited liability company incorporated in Ireland with its registered office at Europa House, 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, D02 WR20, Ireland
| Media Release: James Hardie Industries Announces Chairperson Succession Plan | 3 | ||||
EXHIBIT 99.8 Appendix 3X Initial Director’s Interest Notice | ||
Rule 3.19A.1
Appendix 3X
Initial Director’s Interest Notice
Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.
Introduced 30/9/2001.
Name of entity James Hardie Industries plc | ||
ARBN 097 829 895 | ||
We (the entity) give ASX the following information under listing rule 3.19A.1 and as agent for the director for the purposes of section 205G of the Corporations Act.
| Name of Director | Peter-John Davis | ||||
| Date of appointment | 10 August 2022 | ||||
Part 1 - Director’s relevant interests in securities of which the director is the registered holder
In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust
Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be disclosed in this part.
Number & class of securities Nil | ||
+ See chapter 19 for defined terms. | ||
11/3/2002 Appendix 3X Page 1
Appendix 3X Initial Director’s Interest Notice | ||
Part 2 – Director’s relevant interests in securities of which the director is not the registered holder
In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust
Name of holder & nature of interest Note: Provide details of the circumstances giving rise to the relevant interest. | Number & class of Securities Nil | ||||
Part 3 – Director’s interests in contracts
Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.
| Detail of contract | Not applicable | ||||
Nature of interest | Not applicable | ||||
Name of registered holder (if issued securities) | Not applicable | ||||
No. and class of securities to which interest relates | Not applicable | ||||
+ See chapter 19 for defined terms. | ||
Appendix 3X Page 2 11/3/2002