James Hardie Industries plc (JHX) September 2026 Capital Markets Day Transcript

All right, good morning and welcome to James Hardy's 2026 Investor Day. Thank you for everyone that's joining us in person today. It was a huge turnout. We've got an extra room over there for the spillover. And thanks for everyone for joining online. A big thanks to those people who have traveled far. We've got a pretty big contingent from Australia with us today. Let's see here. Safety note. So you came in these doors right here. there's an emergency exit to the left there and the convene staff will be there to help you if needed and let's let's go through the FLS the fun stuff please note that today we may refer to non-gap financial measures and make forward looking statements you can refer to several related cautionary and other notes in this slide forward-looking statements made today speak only to the date of this presentation forward-looking statements are subject to risks and uncertainties and could cause actual results to differ materially from those in the forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on forward-looking statements. In addition, non-GAAP measures should be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of non-GAAP measures discussed are found in the presentation in the appendix. So let's walk through the agenda here for today. Okay, so we're going to start with Aaron Erdy, then we do John Skelly, John Madsen, Sam Toole, and then we're going to do the first Q&A session where all those speakers will come up. We'll take a short break. During that break, you're welcome to go out there and see the demos again, and then we'll come back with Ryan Kilcullen, then Ryan Lada, and then Aaron will do a short close, and then we're going to bring the whole group up for a final Q&A, and then what we have is uh then we're gonna have the leadership luncheon which is kind of what you saw there we'll have lunch out there another chance an hour for you to check out the demos and then just one one little note here uh we're we're doing a decking teach-in uh so for those of you want a primer on decking we're gonna it's not on the schedule here but we're doing a teach-in for decking that will start at 1 15 1 15 to 2 that's optional of course if you want to do that um so that again

the the main demo area will shut down kind of about one a little bit after and then we'll start the decking presentation for those of you that want to do that 1 15 to 2 all right let's get started we're gonna queue up a video some moments mark a turning point a company with deep roots trusted products the category it helped define and then something new two industry leaders one shared vision built to lead what's next the combination of james hardy and the azac company didn't just add brands it built something the market has never seen Number one and number two brand positions across every category we serve. Siding, trim, decking, railing, outdoor living structures. The home of resilient beauty. And beneath it all, a manufacturing and circularity platform that no competitor can replicate. The largest vertically integrated recycler of PVC in North America with over 3.5 billion pounds of otherwise landfill-bound material reclaimed since 2019. Built on innovation that runs deep, from material science and proprietary technology to design leadership that keeps us ahead. And the momentum is real. The best sales team in the industry. Deep relationships across every layer of the value chain. Contractors, home builders, dealers, retailers, and homeowners. One hearty isn't an idea. It's who we are. We're at the beginning of something extraordinary. The material conversion opportunity across siding, trim, and outdoor living is measured in the tens of billions. The housing stock is aging. A new generation of homeowners is arriving, and they want products that look beautiful, that last, that they can feel good about choosing. James Hardy is positioned to lead that conversion. With the brands, the innovation, the manufacturing scale, the commercial relationships, and the team to make it happen. For our shareholders, this is durable, long-term value creation. For our employees, our customers, and our communities, it's something more. It's building a better future for all. This is The New James Hardy. All right. Good morning, everyone. What a voice on that announcer. there. That's the Hardy operating system in action. All right. Hey, good morning. It's great to see everyone here and also welcome to everyone who's on the webcast here. We got a packed house and a beautiful day here in New York City. Also want to thank our team. We have some of our leadership team that you'll hear from here today and then also you'll get a chance if you haven't already meet many of them who are out there manning some of the product stations and also I want to thank our team across the globe you know this is a monumental moment for us as we think about what we've been through over the last year it's been 14 months since we came together with azac and there's been a lot of ups a lot of downs integration is is never perfect here but here's really the message I want everyone to take away is this is working this is working what we said was going to happen you know over a year ago putting these two companies together this is working I think the important point here is we're just getting started part of the the thesis of bringing the two companies together is really what our Investor Day theme is here. And it's built to outperform resilient by design. So what I'd like to do here now, and you're going to hear the rest of the day here, is this thesis and how we're going to make this happen. So let me dive right into it. Look, as we brought these two companies together, the idea was to be able to outgrow the market. no matter what. Certainly the market is challenging right now. One quarter does not make a total thesis right, but like I said, we're on our way and it's working. I think the other thing as we brought the two companies together was to accelerate growth. And you'll hear some of the initiatives that we have and we only have by bringing these two companies together. The other piece of this, which is, you know, not unique to our industry and building products, but you see more and more consolidation within our industry that happens every day you hear about a deal that is not going to stop happening if anything as the market picks up a little bit we think that's only going to accelerate and that's why having the strength of brands the team the products makes this much more important for us to do and we're sitting in a really good place here right now so look the five pillars that are going to really you know we're going to dive into here today is delivering growth above the market and that means it's not dependent on okay when housing comes back we're going to be able to grow we're going to be able to grow no matter what that's what putting these two companies together and we're able to do that because you'll see from the team we have fiber cement we have deck rail and accessory initiatives that are going to sustain long-term growth for us. The other piece, which we're excited about, and we've made a lot of progress. I know when we announced this deal, there were many naysayers about our $500 million in commercial synergies. That is going to happen. We are well on our way. I would even say at least $500 million of commercial synergies for us. And you'll hear John and John bring some of this to life but our customers are aligned with us they want to do business with us our contractors want to use our products so that's point number one if i think about point number two it's the enduring competitive advantages and i'll spend some time on this but you can see on the list here we said products brands uh manufacturing hardy operating system deep relationships our commercial strategy If a company had one or two of these together, they would feel pretty good. We string all of these together. This is very hard to compete with. The other thing we're going to unveil here, I know in these investor days, and certainly many years past, I've done it before. People have done it before. As you put three-year, five-year targets out there, the way the market is, how could any of us predict what that's going to be what we feel comfortable with and what you're going to see i'm going to take you through it at the end of my section here ryan will dive more into it is we have a compelling growth algorithm think of it as a differentiated type of portfolio growth stack of things that we're going to do that we're going to be able to outperform the market no matter what. Right? So outperforming the market, whether the macro is tough, right? There's inflation. There's more consolidation. So you'll see that. And look, what's exciting is we continue to enhance our cash flow. You know, we are delevering pretty quickly. You see our margins continue to build. So we're going to have a lot of cash. And I think what's really interesting here and what's exciting is the optionality we're going to have as Ryan takes you through the capital allocation. The other thing which I'm most excited about is, you know, us being able to consistently execute. And I know that's what you look for, right? You know, are we able to do this day in and day out? And as I told my team last night, many of you are here, you know, you want to see if you understand the strategy you want to understand if you have confidence in it but then there's do you have confidence in the team that's going to go out and execute upon that and i think we have the best team in the industry um so you're going to hear more about the uh these investment pillars if you will but let me go right to what i just mentioned and talk a little bit about our team because one of the things that i'm most excited about is for you to hear from this team and look i won't go through all their backgrounds because uh you know they can take you through it but as we decided to bring these two companies together there's different approaches you can take and i've been through a few of these you can say okay we're the acquirer we're going to do whatever you know it's going to be the legacy team that's going to run the business we took a different approach we said these are very similar type of companies right and so the best approach for us is we move forward in this is what we've done not only with the team but we've also done this with the way we've set up the entire organization our processes is we're gonna take the best of both and that's what we've done here and there's really no coincidence why as you look at the backgrounds here, you have equal amount of legacy ASAC, equal amount of legacy Hardy here. So John Skelly, who runs our largest business, he's going to come up after me. You can see the breadth of experience that he has. John Mattson, who's our chief sales officer, new to that role, but certainly not new to the industry, is a legacy James Hardy guy since 2004. Sam Toole, who's legacy AZAC, but deep experience in marketing with consumer brands companies. Ryan Kilcullen, legacy James Hardy guy. And then my partner in crime there, Ryan Lada, who's legacy AZAC that we were able to bring him back. So look, we have a very strong leadership team. And with that context, what I'd like to just breeze through here quickly is who is James Hardy today. Okay, so we won't go through this in detail because I think many of you are familiar with this, but James Hardy, you know, we're listed in New York Stock Exchange, listed on the ASX. You can see our last year's sales, EBITDA, and EBITDA margin. One of the things to talk about, and I know sometimes this can seem like fluff, but it's very important to us and was very important as we brought these two cultures together is about our purpose, vision, mission, and values. What we always start out with when we talk to a customer or we talk to a supplier is we talk about our purpose. We think it differentiates us. And our purpose is building a better future for all. You saw a little bit about that in the video. That's what unites us of all the different things our teams are doing. Our purpose unites us because we want our team to look through that guise on how are we building a better future for our stakeholders, whether that be our customers, our suppliers, the communities in which we live and work, and also certainly for our investors as well. You can see the split out of the business. Obviously, North America, the lion's share, this is pre-divestiture. So we have Europe and Australia and New Zealand. You can see it's about 10% each. And then getting more into North America, since we've come together with AZAC, repair and remodel accounts for about 57 percent of our business new construction 43 percent and then diving a little deeper into north america you can see the product or the segment breakout and you know the legacy hardy business fiber cement is still 60 percent of our business okay all right so let's take a little bit more of a dive into north america and john and ryan are going to cover more of this but our business in north america this is the growth engine that split out in siding and trim, and it's split out in deck rail and accessories. As we mentioned, siding and trim is the largest part of our business. The other thing to take note from this slide is you just see the footprint of our manufacturing locations. When we talk about enduring competitive advantages, this is really key because we have about 26 manufacturing locations across North America. They are close to our customers. This is on purpose. About 90 percent of our customers are within one day's haul. This matters, right, for quick turnaround. So this is a competitive advantage for us. So as I said, the team's going to dive more into North America. Let me cover our international business here very quickly. So Australia and New Zealand in Europe and I'll get to Europe here in a second one of the questions I anticipate and I'll cover it right now is are you committed to Australia and New Zealand yes absolutely and I see some of our friends from Australia here laughing yes we are committed to Australia in New Zealand we love this business this has been a great business for us John Arneal and his team do a great job uh you talk about different difficult operating conditions that's what's going on in in australia right now and these guys continue to deliver growth so we like this business it's our most profitable business uh we have good market share there our brand is iconic in australia and we see growth in australia and one of the things that we're starting to do because of the strength of our brands the strength of our position within the channel is we're getting into more building products it was really just fiber cement so we just launched this past year aerated concrete it's called hardy gravis and we expect next year to take some of the azac technology and get into outdoor living in australia so uh great business for us we like this business a lot. Going to Europe, look, we announced the divestiture of Europe. And I know with many investors, this is always the question, what are you going to do with Europe? Look, the European team is a stellar team. They've done a great job. If I look over the last four years, their ability to grow the business in a down market, you know, accretive margins, they've done an excellent job. what we wanted to do is shift our focus where we think we have the best right to win and the greatest opportunity and that is australia new zealand but primarily in north america so you can see the you know the the sale of europe 980 million dollars ebitda multiple around 12. we think this is going to close the first half of next year and certainly you saw the announcement uh we're going to use some of the proceeds to accelerate our debt pay down. And then we announced board approval for a share buyback. Okay. So a little setup on the business and I got to keep moving here, stay on time. But we talked about this in the beginning, 14 months since the close of the azac acquisition and you know i talked to many of you it feels a lot longer than 14 months you know sometimes it feels like that this has been years upon years and that's usually how integrations go and our team has worked relentlessly in making this a success and you know again after being through a few of these this has been a success is the way we put these two companies together. Certainly nothing's ever perfect, but I think the numbers speak for themselves in what we gain by bringing the two companies together. I mentioned the commercial synergies. We'll unpack that a little more. We feel very, very confident in our ability to be able to deliver on those commercial synergies. I think all of you are going to walk out of here and be like, geez, it's only $500 million. The other thing, our cost synergies, is we said that we were going to do this in three years. We're going to finish it at the end of this year. So we're going to be at our $125 million in cost synergies by the end of this year. That's a testament to the team and the work that they've done. Now, does it stop there? No. Where we shift more towards, too, which we always do, and Ryan will talk more about it, is our hardy operating system, which I like to say is our inflation mitigator, but it's our cost savings arm, right? We are always in continuous improvement. So we certainly see more opportunity, but what we stated out there publicly, we're going to be finished with, hit that goal at the end of the year. I think the other thing that's really exciting, I'm going to get into here in a moment, a moment is bringing the two companies together. Again, this is the point of stronger together versus separate, is we increased our opportunity, our TAM, by more than double, right? We now have a serviceable, addressable market that goes from when we were just James Hardy, $10 billion to now $23 billion. So that's pretty exciting if you're sitting there as an investor, certainly exciting to us as we think about the opportunities out there. And then I'm not going get into the commercial because john's going to cover that john and john will cover that and ryan's going to cover more of the operational piece but look it's exciting to see again taking the best of both one of the things that we've done is taken our hardy operating system and started to implement that in the azac plants we're seeing a tremendous amount of efficiency here all right so let me shift more towards what is the opportunity for for us look it's large right if we think about this and it is really set up well for us right for having resilient beautiful product right customers are more when you think about repair and remodel for instance it's just not turnover repair and remodel. It's preference, repair and remodel. They're choosing what they want. Then, you know, a lot of them who are more affluent, right, who are buying our products are choosing to have resilient, beautiful product, product that stands up to water, stands up to pest, stands up to fire. You know, if we look at our portfolio, we're really the only ones who can claim that out there. So that is a big part of what we do is material conversion. And our opportunity is to convert share from inferior, less resilient products. You can pick the product or the substrate. Inferior products, we're working with homeowners and contractors to convert them. I think we do have some tailwinds here. If you look at the aging housing stock, you look at for repair and remodel, 35 million homes, 20 to 40 years old. They're ready to be repaired. You go around here in the New York City area or where I'm from, Chicago, you go to the suburbs. It's just endless, right? The vinyl homes, the wood homes that are all right for our 500 person sales team and all of our partners to be able to go out there and convert. And then you look at, you know, the number of decks that are older and the team will talk about this, but certainly another opportunity to convert, you know, inferior products like wood to our PVC and composite materials. And then look, the other thing that is more prevalent here in the U.S. is you think about one third of the U.S. homes are in WUI zones. So I know I'm going to get this wrong. I do every wildland and urban interface zones. Right. So think about wildfires. And if you're rebuilding, you need to use materials that are fire resistant. And as I talk to our materials are perfect for that. So that runway is meaningful because we now have the portfolio to capture, you know, more of the exterior. So let me just show you how this comes together. And I'm not going to spend a lot of time on this, but you can see siding, trim, decking, railing, accessories, all outdoor living. Right. I think the point here and we went back to talking about consolidation within our industry. this completeness that we have to offer now changes the conversation that we used to have as James Hardy and AZAC used to have as AZAC. Now we have more to offer, whether that be our contractor, our homeowner, our dealer partners. That's very important as we think about what's going on in our industry. So look, a complete portfolio matters, but what's even more important too is having iconic brands that contractors are demanding, that they want, because homeowners are asking for. And I won't go through all the ones and twos, and I don't like to see twos, and we're going to change those here very soon. But you can see from sighting, we are the brand out there decking we are the brand with the pro you can see trim exteriors we are the brand pergolas structures railing and then even recycling so this is very important for us we call them iconic brands i think about them as hero brands so look these brands are really important but part of bringing the two companies together uh was really important and big part of our strategy is having the right distribution model and the team's going to go through this more in detail but we announced this about 45 days ago you know our two-step distribution partnership ships now just step back here very quickly and tell you this this has been part of our plan for well over a year as we think about the two companies coming together and here's the list of actions that we're gonna go out and do to make these the 500 million dollar synergies a reality to be able to go out and service our customers better this has been part of the plan and so we were able to do this by coming together certainly boise has been a long-standing great partner of james hardy for years and so we utilized that relationship talked to them about decking talked to them about trim we did some test markets it worked exceeded their expectations so this is full alignment with what we think is the premier national two-step distributor. That plays well to our strategy of having our product readily available and more available to more of our customer partners. Coupled with that, because of our ASAC relationship, is the best-in-class regional two-step distribution partners. So we have been talking so much, I'll give you a for instance, about our desire as James Hardy to go out and spread fiber cement in the Midwest. That's not been an area that we focused on for years, right? We were focused on more new construction areas, but that is a hotbed of repair and remodel for us. We have, for instance, and all of these are outstanding two-step regional distributors, but we have a partner in Lumberman's who knows that market better than anyone who are now going to bring in James Hardy fiber cement for the first time, getting rid of a competitor, and they're all in with us. So I'll let John talk more about this, but this is really, really exciting to us on our future and how we're going to be able to achieve our goals. So as I start to wind down here, how are we going to win, right? And how are we going to defend and i just look at our we started to think about what do we do that no one else can touch right and i talked about this in the beginning but really enduring competitive advantages the leading brands resilient product portfolio scaled localized manufacturing you know our hardy operating rating system deep relationships across the value chain and this is really important Because we talk about 500 sales reps, but John will take you through this here in a moment. You start to compound that 500 with all the relationships we have, the thousands of one-step distributors. Boise Cascade with 750 people on the street, and it just compounds. They're all out, unified with us, aligned in selling our product portfolio. of. And then certainly we think about the differentiated commercial strategy. Again, and just to take note of this, you have one or two of these, it's a differentiator. You have all of these together. This is very, very hard to compete with. So, you know, you translate these to the team of what are you going out and what are you doing each and every day? And this is what our teams focus on. Number one, accelerate material conversion. Everything really leads into this. So that is converting inferior product to our product. Drive channel expansion. You know, as we talked about some of the deals we just mentioned with Boise, regional distributors, we'll talk about ABC, we've talked about Lansing. The list goes on and on. Make our product more available out there john will cover advanced product innovation this is again bringing the best of both together and we think we have a long runway and some some exciting innovation that we're going to be all for our teams continue to extend our extend our brand leadership and then this is really who we are when we talk about enhanced homeowner and pro journey this is all about being homeowner focused customer and contractor driven how do we make it easier for all those in the value chain. So look, this all leads up to where we think we can take this business. And ultimately, we're judged by the points we put on the scoreboard. And what we're doing is we're targeting organic growth of 4% to 7%. That's not market dependent. And the way I like to think about this is a differentiated portfolio. So certainly we have the long runway of material conversion that I just mentioned. We have growth initiatives and we have our revenue synergies that we would layer with this. And then certainly, you know, net price that we come out with every single year. So if you ask me to break this up, I'm not going to. This is a differentiated portfolio because one year one may be more than the other but in balance we are confident that we can get to that four to seven percent not market dependent and then if we think about opportunity here on top of this for growth certainly bolt on M&A and if we get some tailwinds from the market so in closing here our investment thesis for all of you is look we're going to deliver growth above the market. It's not cycle dependent. We have a list of competitive advantages. Put them all together, very hard to compete with us. A compelling growth algorithm with compounding earnings is going to increase and enhance our cash flow. It's going to give us optionality as we think about moving forward, what to do with that cash. And then we have the team that's going to deliver consistent execution to really build on long-term growth. Okay, so look forward to spending the day with you. I'm excited to introduce here our President and General Manager of North America, John Skelly. All right, John.

Cheers. All right. Good morning, everybody. Wow, what a room. It's great to see so many familiar faces and get to share with you a little bit about the North American business. So my goal, my objective here is to get you a layer deeper. I really want to focus on how we execute, how we win. That's going to be the agenda today. So I appreciate the introduction from Aaron. I joined ASEC in 2018. Prior to that, I had leadership positions at Granger and Home Depot. I was president of the ASEC business prior to taking that role here as the president and general manager of North America. though. I'm just one individual. I think what's most important is the full team that we put together, right? I think we have a team that has a proven ability to execute and drive share gain and value creation, right? We work together hand in glove. The operating cadence, the capabilities, you know, what we do as a team is really different. You put that team on top of the platform that Aaron just mentioned, that's how you drive value creation, right? So if I leave you with nothing today, it's not just a differentiated platform. It's not just an individual. It's a team of individuals massively aligned around a vision, a mission, and a purpose. And we're here to deliver value creation and share gain. In terms of the four key points that we'd like to focus on today, it's pretty simple. First and foremost, we're in a highly attractive market, right? Aaron talked to about the 23 billion dollar opportunity that we have in front of us we have a massive massive opportunity around material conversion what does that mean that means we don't need a new strategy we don't need to create new growth categories we have a 23 billion dollar opportunity that we have to execute against and we're already doing that we're winning we're putting points on the board we're delivering second we have a great strategy it's simple five things we're focused on it and again back to the team we know how to take that strategy and drive execution against it right a lot of people look good on paper but what really matters is do you get results and we're gonna talk to you about how we get those results third we have unique advantages right so Aaron touched on it I'm gonna go deeper on that today when you look at the brands you look at the manufacturing capabilities you look at the downstream conversion capability right it's just massive I'm gonna show you a slide later that I want everybody to pay attention into. It's got puzzle pieces on it. It's going to talk about how it all comes together, creates sustained strategic advantage, and it's very difficult to replicate. Fourth, with that platform, what you're going to see that's a little different about us is we don't have a spread the peanut butter, one size fits all approach. We have focused regional execution and strategies to win. What resonates here in the Northeast is not necessarily going to resonate in California or Texas. And so we're going to have a focused strategy to win and focused execution in each of those markets from a product perspective, from a sales perspective, from a manufacturing perspective, it all comes together delivered locally at scale. So let's talk a little bit about the opportunity. This is the breakout of the 23 billion by our product lines. When you take a look at this, what's most important is we have a lot of opportunity across each and every one of our product categories. So whether it's in siding, decking, or trim, we have 70 to 80% opportunity to convert. Again, back to the earlier point here, we don't have to go look and say, what's a new growth channel for us to grow? We have these opportunities. They're massive. Siding, $12 billion. Other exteriors, an additional four. Decking, six. So you look at the size of these market opportunities, you think about our presence, and then think in each and every one of these, as Aaron mentioned, inferior materials, right? People don't want wood that rots on their home. They don't want vinyl that fades in three to five years. They don't want stucco that cracks. We have solutions and opportunities to address each and every one of these inferior materials and convert them to our value-added, beautiful, and resilient materials. I think when you think about the long-term opportunity for this business and why material conversion matters so much, one point, if we can drive one point of material conversion, and if you look at our history over the last several years, we've driven massive material conversion. every point of material conversion drives four points of category growth for us right so that leverage effect is really important so when you look at that opportunity when i say 70 to 80 percent of the market can still convert to us each point drives four points of category opportunity for us right that's massive opportunity so what's our plan to win this is it five pieces and this is what we're going to execute i'm going to give you a slide on each of these in the future we're going walk through each one step by step what's really important here is we have a proven track record so again i talk about that team this is not a dream this is reality each and every one of these pillars we've already made significant progress against and i'll talk to you about how we're going to continue to drive that growth in the future through them first foremost material conversion we have to accelerate that it's about education awareness and driving contractors dealers and homeowners to understand the value proposition why they should use our products and not something that fails it's pretty simple replace things that fade and rot with things that are long lasting beautiful and resilient channel expansion this is just getting our product more available and on more shelves for more customers to buy right we're going to go into detail on this whether it's pro big box whatever it might be we want our products to be available everywhere, and we want more of the portfolio to be available everywhere. Third, advanced product innovation. This is core. This touches on the kind of best of both principle that Aaron shared with you. This is bringing the AZEC innovation engine to the entire one James Hardy and accelerating our ability to bring products to market that solve customer problems. Fourth, extend brand leadership. The best brands drive the most traffic at our customers. The best brands are what are trusted and desired by homeowners. We have those leadership positions, and where we're not number one, we're going to get to number one very quickly. And then finally, enhance the homeowner and pro journey. This one's really important. The easier we are to do business with, the easier it is for you to repair your home, the easier it is to install our products on a home, the more we win. So we're going to continue to improve the opportunities for homeowners and contractors to work with us and drive more value creation for the business and this is all underpinned by the advantages we generate around haas the technology investments that we've made and the entire support system that works with the business the commercial organization the product team the manufacturing teams to get fully aligned and drive our strategic priorities okay so material conversion this is by far our biggest opportunity right i shared with you the numbers the conversion opportunity 78% opportunity. If you look at the macro here, if you look at the setup, it's all about education and awareness, right? So again, whether you have an aging home, whether you have some of those climate issues such as fire or hurricanes or moisture, all of those trends, we have consumers' attention. The homeowner cares about these things. What's beautiful about our portfolio is it fits perfectly against those macro trends and that's going to help us accelerate material conversion if you've had an issue with a fire if you've had an issue with a flood at your home the last thing you're going to do is put wood back on it you're going to find a product that comes from james hardy to solve your problem so we have the consumer's attention and we're capitalizing on that to drive accelerated conversion with that awareness we take our 500 sales people we take our thousands of partners to drive that message we cross sell the full portfolio if we get somebody's interest in sighting that's fire resistant how would you like to buy fire resistant decking to go along with it so that allows us to unlock the cross sell in this full portfolio cell what our team does that's really unique back to local strategy is you have 500 sales people on the ground i call those the ground troops so they're out there market by market and not just market by market, block by block. If you flip one home in a neighborhood to Hardee and the guy next to you has got vinyl, the guy's looking over his fence and saying, I want that. So that's market development. We do it market by market. Take the ground troops, bring in our world-class marketing organization. That's our air cover, right? So whether it's a national campaign, a local campaign, they are getting down and dirty, working closely with the ground troops to say, hey, if you're in California, you're probably going to get messaging about fire. If you're in the southeast, you're probably going to get messaging about rotted, pressure-treated lumber, right? So it's a tailored approach, delivered at scale, and that's something that's really unique to us. We have the capability to have the right messaging, the right product offering that's going to connect the most with that consumer based on your region. And then what we do with the product organization and the innovation engine is we take feedback, okay? What are our gaps? What are our opportunities from a product perspective. We're talking to builders, we're talking to architects, we're talking to contractors. How do we improve our product offer? We take that back to our lab, back to the R&D, drive the innovation of the new product that we then launch to solve that customer problem. So it's this positive flywheel effect that you have in the business that allows us to take additional share. And when you look at that local relevance, you take that big $23 billion opportunity and say, okay, how do I boil that down to local market? A couple of examples here, fiber cement in the Northeast, look at that conversion opportunity. It's massive. And then you go down the South, you look at all that pressure-treated lumber, and you look at the opportunity to convert all that pressure-treated wood to timber tech decking. It's huge. What's really unique about our business, if you look at the Midwest, and Aaron touched on this with one of our partners, lumbermen, but if you look at the legacy timber tech and azac relationships in the Midwest and Northeast, we are the brands. We're the winners. We have the locations. We have the customers. We are we doing? We're pulling through some fiber cement R&R in that market. Same is true for James Hardy in the South. They own the South. Now they're helping pull through decking and railing through those relationships that they've established in the South. So when you talk best of both and when you say what is a synergy, that's a synergy brought to life where you take relationships, presence, and a broader portfolio and you drive cross-sell in two very important markets with large conversion opportunities okay this is the uh aforementioned really important slide so i want to spend some time on this right when you when you think about what is sustained competitive advantage like what can this company do that no other competitors can do this is it so let's let's dig in a little bit here channel expansion what this means is again how do i have my products closest to the customer to drive value creation and share gain. It starts with Ryan, Ryan could come up here and tell you a little bit more about the manufacturing network. Aaron showed you the map. Look at that platform of manufacturing that we've created, right? We have billions of dollars of investment against this, right? So for those of you who don't know, it's not cheap to build a fiber cement plant, right? And we have them incredibly close to our customers across the U.S. You take that product from those manufacturing facilities with high service and great quality, and then you deliver it to the best-in-class distribution network that Aaron just showed you, right? So we have the best of the best in terms of service. They have the most salespeople. They have the most demand generation. They're taking our product, and then they're delivering it close to the customer. So who's the customer? It's close to 4,000 big box locations and 14,000-plus dealer locations, right? So those distributors, and again, they're not just delivering product. What they're doing is those distributors are bringing that product to those retail locations, to those dealer locations. In the case of Boise, they have 750 salespeople, and you just compound that by all those other distributors, and you have a massive force of downstream demand generation happening at the customer level, okay? They're doing things like quoting, they're merchandising, they're training. I mean, make no mistake about it. These are not delivery drivers, right? These are value creators, right? And then they're educating those dealers along with our sales team. So John will talk more about this. You have this massive training and massive coaching opportunity where the inside sales teams and the outside sales teams of all these locations or even the in-store sales associate at a place like Home Depot or Lowe's, they're being trained, educated, and we're merchandising all those locations. So when you walk into one of those locations, as a homeowner, you're seeing this massive amount of TimberTech, Azek, James Hardy, and you're being sold to by an educated salesperson that we've trained and the distributors have trained. We then attach that to our pro network. 30,000 pros are in our program. We have about 300,000 total in our system, right? Right. They are. And these pros, as some of you've heard before, they bleed green. Right. I mean, they are completely connected to our business. We think that that's 10x the size of any competitor in terms of people in the program. Right. So when we offer things like additional labor warranties, when we offer them training and coaching and development, when we offer them leads, we'll talk about later. I mean, we delivered last year 40,000 homeowner leads to that contractor base. I don't know about you, but if you're a contractor and you're trying to grow a business, do you want to work with a company that gives you 40,000 leads a year, that has market-leading brands, that stands behind you when you have an issue with a product, if you have a warranty claim? That's who I want to work with, and that's why our customers are so sticky with us. And then we attack millions and millions of homeowners. We touch them every day, local marketing, national marketing. We're driving the trends in the industry. they see the beauty, they see the aesthetics, they see the capabilities of the company, and they say, I want James Hardy on my house. No one else can replicate this. No one can. I mean, this took decades to create. And when you talk about why does scale matter, this is when scale matters. The scale that we're able to operate this at and then deliver it locally, it's incredibly unique. We think this is sustained competitive advantage. We think this is virtually impossible for anybody for anybody else to recreate so innovation um at the end of the day i think it's really important to remember that the reason we exist is because we're a product company right that's where it all started we developed beautiful high aesthetic high quality products that solve customer problems and what we've been able to do is we've been able to evolve over time both james hardy and legacy azac sort of started from a premium position that's where you always want to start. You want to start at the highest quality level, and then that gives you a lot of optionality. What we've done is we've expanded into good, better, best, and premium. Why does that matter? That allows us to meet the customer at whatever value points import to them. That allows us to be more important to more consumers and to more contractors across North America. So we have a very focused product development strategy and a very focused R&D agenda. This is the best of both. We've consolidated our R&D groups, our product groups, and we are reigniting the innovation engine across James Hardy. So there again, sustained competitive advantage, the ability to continue to produce products that consumers ask for, take those insights, bring them back into the business, create new products, and then go back out with our downstream sales and marketing execution and drive share gain.

We're making significant investments here.

Aaron talked a little bit about the recycling capabilities that we have. This allows us to not only do good things for the environment, but at a very favorable cost position. Brands. So you're going to get a lot of this from Sam in a moment. I love these charts. Up to the right, big plus signs, lots of big numbers. I think you get the point, right? A brand is really important to driving success in this business, right? Contractors, again, want a brand they trust. homeowners want a brand they trust our ability to activate these brands is second to none Sam's gonna tell you a little bit about it we insourced our entire marketing team we don't rely on outside agencies everybody who does marketing for James Hardy does it a hundred percent of their time they're focused on our brand message they're focused on our creative they're focused on our execution this is what's gonna allow us to be number one across all categories right we're getting close we have a lot of momentum we've been driving massive brand awareness and preference over the last several years we're the clear number one inciting we will be number one in decade what really matters here again is this whole trust concept right we have to stand behind our products we have to deliver value at each point of the value chain across our businesses and we've been doing that right again i said it earlier if you have a warranty claim if you have a product question if you have a color question whatever it might be we're going to be there for you we're going to stand behind you this is why the contractors are so sticky with us they know that we stand behind our products they know if there's an issue we're going to take care of them they know that once they install the product and they leave the home that the product is going to withstand and still look beautiful years for years to come the contractor's biggest nightmare is getting a call back that's time taken away with no additional money we stand behind it that's what our brand means that's what our brand stands for and i think you're gonna be really excited to hear some of the things that sam and her team are doing to execute against this homeowner and pro engagement i talked a little bit about this earlier again our massive advantage that we have in terms of the contractor base we work with 300 000 we have 30 000 in the network each time we convert one of that 300 into the 30 and grow that that becomes a really positive flywheel john's going to talk to you about some of the specific wins. Like the way I, my words on this would be simple, is we're hitting a lot of singles. Like every day, 10, 20, 30 contractors are, I'm putting in siding, I walk into the house, I'm sitting down at the kitchen table with the homeowner, and I show them that their deck's rotting. So what am I going to do? I'm going to talk to them about TimberTech, right? I see that there's trims rotting around the windows. I'm going to talk to them about Azek, right? So this position that we have, the breadth of our contractor network, the depth of our contractor network that gives us an opportunity that nobody else has we are at the kitchen table with the homeowner we're talking to them about the beauty of their home we're talking about the resilience of their home we have their attention we have their access and now we have more products to sell them it's a huge advantage talked about those 40 000 homeowner leads that we have it's massive one of the other things that we have to do here is reduce any friction that's involved in the business from trying to get to an inspiration, an idea of what my home could look like, to a completed project. We're investing massively against that. Whether it's visualization, digital tools, we are driving more engagement, and we are driving an easier process to get either your home resided or to create the outdoor living space of your dreams. Massive investments against that. It's working. We'll talk more about it. And then this is just, I'm not going to spend a lot of time on this but just a quick snapshot john's going to come in and talk more of this this is a vision of how we execute regionally right so again different approaches different strategies by region with dedicated playbooks that allow us to win what's locally relevant across but again what's really exciting here is just pick your geography 1.3 billion dollar opportunity around fire in the west 1 billion opportunity around fiber cement rnr in the midwest and northeast right anywhere you go we have multi-billion dollar opportunities to win and convert inferior products whether it's wood stucco engineered wood brick you name it we've got a plan to win and we're executing that plan and we're putting the points on the board so I'll end with where I started four key points we got a great business and a great market and we know how to take share we have a five pillar simple executable strategy what you've been seeing from our recent results is we're putting points on the board we're delivering against that strategy the product innovation and scale capabilities are unmatched we have the ability to bring new products to market drive downstream conversion and generate wins and we're doing that locally in a locally relevant way by region and again proven results and we really really think our opportunity to continue to drive share gain and market development across north america is unmatched Thanks so much for your time. I'm going to hand it over to John Madsen.

My name is John Madsen. It's good to see a few familiar faces in here. I have been with this organization for 22 years, and it's a pleasure to have done many of the roles that I'm going to talk to you about today. And some of the markets that I've worked in are where we're really attacking differentiated positions in North America. So before we get started, I want to walk away with some of our key messages. One, we've been through a tremendous lift over the course of the past 14 months. We've done things to pull this team together, and when you have the opportunity to lead an organization inside of this industry that we get to work in, where you have two companies that are coming together that are anchored in material conversion and in hunger to grow and take share from the competition, and then you get to put them together, it's no easy feet and we're talking about how we built that organization built on commercial excellence focused on the customer believing in the value that is our number one value that it starts and ends with the customer then we've got to take the game plans into our regional playbooks and so each market is different what we do every single day what type of competition we're against what customer needs are how we develop and train our leaders that develop and train our teams each day we have a playbook that we're running and we're operationalizing we've got to take those teams in a specialized way to deliver value to our customers knowing that the needs at a particular dealer location could span exteriors outdoor living and their targets and how do we activate that the most effectively with the teams that we have in the field driving that position and pulling through and converting material every single time we go and work with each of these dealers and how we drive that. And then finally, leveraging the portfolio. Aaron and John talked about our opportunities that we've already are well underway with our revenue synergies. And my job here is to ensure that you understand that there is proof behind this, because we are out working with our customers, developing those team members, and converting inferior materials through the access that we have with those customers and driving that shelf space gain with each of our product lines. And I'm going to take you through what we've built over the course of the past 14 months, and it's been not easy. We've started this back in July when we came together. We began the integration of the two teams, and we started with the customer. It was focused specifically on what the customer's needs are, what their voice was saying, and how we deliver the most value to them. And when you look at what we've built, we have over a 500-person sales force. We have one point of contact at the channel level. We took this new role, which is the channel manager, and they are the quarterback at the channel. We have six divisions across North America. we have over 13 we have 13 regions we have 36 different districts and in those districts you can see these market directors are leading teams that have a channel manager that work with our dealer partners every single day they work on different needs that the customer may have whether it be a pro one-stepper that has a space constraint and we're looking at how we deliver that material more efficiently and effectively the targets that we're driving to grow exist expanded category or market share and that particular channel manager takes those needs identifies joint targeted opportunities and passes them to the specialized sales force that we have in those regions we've specialized our teams around siding and trim and our outdoor living game plan those lead those particular individuals are dedicated to downstream demand conversion they're identifying targets with their customer partner their dealer partner and they're identifying them and taking the value propositions that we have regionalized to each of those opportunities so that we're creating value at the contractor level that answers the call of our homeowner journey and then pulls that back through our aligned partners in a way that it's differentiating our position creating value at the dealer level, and enabling them to sell more and make more selling James Hardy's suite of products than any of their competitors. When you look at the outdoor living and DRNA specialists, they work in tandem with that channel manager, but we enable it on the site so that we can convert that product line with our technical specialists. We've created technical sales across the business for many years, but this team continues to enhance in a way that's differentiated versus our competition we've got technical sales leaders that oversee a region they work with contractors in the companies as they identify new opportunities with their builder or are in our communities or cut are in our contractors we have technical sales managers that drive that relationship in those districts they work closely with them on the technical aspects of putting the materials to the wall or to the joists and then they really drive our opportunity to leverage the labor in the marketplace with our technical sales specialists a group of bilingual individuals that are activating our capabilities on the wall so that we can take more opportunities against vinyl or inferior materials create efficiencies to drive that growth and then ultimately move a market from an inferior material like vinyl to james hardy This organization was handpicked. We have the best two companies in our industry coming together. There's capabilities across both sides where we balanced our six divisions. As John and Aaron both stated, we took the best of both. We have a perfectly balanced three regional vice presidents from the legacy AZAC organization, three regional vice presidents from the legacy James Hardy organization. Each of their particular regions in the market are well-balanced between legacy leaders on each side of the business, taking the capabilities, the strengths, and the development opportunities and putting them into action with our sales team. Many of our frontline leaders are unchanged. Our frontline sales folks are unchanged. They had an expertise in outdoor living or an expertise in exteriors. And they're taking and harnessing that with the channel manager to drive that growth back to the dealer level, pulling that material conversion back through, gaining shelf space share, and delivering value through the channel manager to enable our ability to be the most effective partner with our entire value chain. And I'm going to show you a slide here in a little bit that articulates that value chain and walks you through how that force multiplier that Aaron referenced is activated with this team and how we designed it. When you look at the regions, it's not a one-size-fits-all approach. The West is a wildly different market. I worked in Seattle for a number of years. I came from the Northeast and said, we should be selling color in the West. We've got this. But when you have a high category share opportunity and you have a tremendous opportunity against wood conversion you have differentiated positions that you have to attack it based on the needs of the market and one of those needs is the wildland urban interface that we've talked about and i'll touch on that here in a bit is there is so much opportunity to shift our market based on what the events that are happening in the market and so when we look at the west outdoor living is a tremendous opportunity for us john mentioned where we have very high share of timber tech we have opportunities to grow with hardy where we have very high share of hardy we have opportunities to grow timber tech what we have is trust and credibility at that dealer level and with our two-step distribution partners in a way that we're gaining access at those dealers we're telling the value proposition of our full portfolio of products the opportunity to be able to engage a contractor and develop their business in a market that isn't as buoyant as years past but still is rich and opportunity for us to go out and convert material when we develop these contractors around our regionalized playbooks and develop the market around the go-to-market strategy or where we aspire to change that market we have a unique skill set and developed sales people that are out there to attack it and when i look at this as a very clean strategy around material conversion shelf space gains through our dealer partners and activating it with the homeowner we are creating that level of value to change the marketplace you get down into the southeast we're driving material conversion with each of our business partners and how we take a challenge against stucco and convert that to fiber cement with a very robust game plan around developers municipalities engineers on block versus frame construction how in a market where people are trying to build more affordably more efficiently we can change the construction style from a block construction in orlando to a full frame construction and we engage every member of that value chain so that we have more addressability on the wall each of these markets each of these playbooks are uniquely differentiated and enabled by our team that is backed by our segments and operations team that are dedicated to each of the functions that we drive every single day we have a team for outdoor living we have a team for exteriors we have a team in lnd that develop the sellers to deliver the value by the region in the differentiated way that we execute it in the north american market i mentioned fire you take a market like denver this is a a market where the wildfire or wildland urban interface is continuing to expand its presence with the consumer. Over 50% of that market is in the WUI zone. There is opportunity where we have a differentiated position versus our competition where our products are either class A flame spread in our vintage line of decking PVC or non-combustible with fiber cement which is a requirement And as that gains traction in each of these markets, we have a very valuable value proposition that we can share with the entire community of builders, contractors, but more importantly, the homeowners and how we take that air cover that John was mentioning and drive it into our marketing message back to the contractor and really capture our capabilities in a market like Denver or the Colorado market and the entire West. then you get into flood i mentioned the florida market and what we're doing differently our products don't rot our products don't have challenges with the high climate contents that we would see in floods hurricanes wind risks but we have this momentum behind us and our composites and pvc decking are going to sustain the performance in those marketplaces and we have a tremendous opportunity to continue to tell that message around rebuild preventative approaches and true value to the regions that we have this is the slide that i mentioned and this has been a ton of fun over the course of the past year because we saw this opportunity when we came together you had two great companies that have great distribution networks but very few of them were harmonized between the two companies and so as we came together we needed the easiest path to market with the best in class two-step distribution and we lived by our principles of best to best in class in market this is a consolidating space that we wanted to give a long runway for growth for our partners to be able to develop our markets work with us closely to drive that force multiplier of our sales force of 500 their sales forces of dedicated exclusive partners and you have a partner like Boise Cascade that both Aaron and John discussed these guys are dedicated to what the call of our history is with James Hardy and we've been a partner with Boise Cascade for the past 25 years but when you look at what their presence is now with james hardy in the full timber tech james hardy azac suite of goods they are a force to reckon with and they're complemented by our regional distributors in capital dixie lumberman's park site and wood grain and then you pass that over to our pro distribution partners in abc qxo bfs these are entrenched in what we've done over the course of the past history with James Hardy and in the partnerships that we have with our independent lumberyards like Riverhead or Interstate and the slurry of those independent lumberyards across the country TimberTech was well positioned and AZEC was well positioned with both of them and James Hardy has been well positioned with the One Step Channel and as you've heard ABC and Lansing have developed into new relationships with James Hardy, and I'm going to part on ABC here in a bit with what we've been able to drive as a partnership and answer the calls of their challenges to really drive value proposition back through our channel. And then on the right-hand side, this is where the specialists are activated. The channel manager works with the two-step distributors, the one-step distributor and retailers, and then further with the specialization, we are targeting single-family builders contractors and installers every single day we're working with them to create the value proposition so that they're selling in the home a more effective approach with that exterior envelope and then with the builder community as the market changes we have the positions with our good better best model to be able to drive our capabilities with each member inside of the builder community and we're fortunate to have earned a position with 23 of the top 25 national home builders and what that drives is a scaled position back to our dealer partners so that they have the turns on our product line that turn allows them to work with the contractors in the rnr space so that they have a robust position around our product groups and are enabled to be able to sell that in every different segment that they operate in so i want to take you through the example of our two-step distribution synergy with boise cascade aaron mentioned that we've been in this for over a year. And when we look at the partnership that we've had with Boise Cascade for the past 25 years, the fragmentation of two-step distribution prior to our two companies coming together, and the opportunity to grow that between a full-line James Hardy product group, we started in Baltimore and Pittsburgh. We had that fragmented distribution around each of the categories and we're able to harmonize through a test with Baltimore and Pittsburgh. And we have the solution that was anchored in our two best in class management philosophy and a go-to-market strategy where exclusivity prevails over our previous history. And this enables our outside sales reps to be able to drive a position where we win, they win, when they win, we win. And it's this accountability between our partnership that enables our groups to go out and sell every single day. Our solution for our two-step distribution strategy was a very clear two-partner approach in every market. It gives them the reach, the connection, and the capability to be able to sell more effectively. The outcome was one national partner. We have over 1,250 persons combined sales force. That means when we're working with them in the field, they're developing an opportunity and we're taking that back to the channel partners they sell to every single day. Retail, pro lumberyards, volume lumberyards, national distributors, and the pro distribution like ABC Supply. I'm super excited about this, but when you look at our partnership, it's best heard from the customer themselves. So I'd like to introduce Joanna Barney, the head of distribution for Boise Cascade, and hear it in her own words.

James Hardy and Boise Cascade have a partnership that can be measured in decades. We are in constant communication about market performance, design trends, changes in the industry that we believe will drive future performance. And as a national distributor that services every market segment, from independent and national dealers to retail and home center channel to the one-steppers, the big players in the multifamily segment, in order for our business to grow, we have to be partnered with the best-in-class suppliers, those who manufacture and consistently innovate and bring the top products to market. James Hardy has been one of those companies for many, many years. And with their purchase of the ASIC and TimberTech brand, we saw that as a strategic move with a bold vision for where they can take the whole exterior product category in the future and the value of portfolio of products can create up and down the channel which is a future that we at Boise Cascade believe in as well and one that we are excited to support and frankly it's a vision that we believe we will make inevitable with the combined strength of our organizations the sales forces that will come together with one common goal the trust that we have each built through the channel with our customers and with the quality of the james hardy timber tech and asic products so we are excited

to be on the forefront of where this bold vision is going and the success we believe this partnership will generate long into the future that bold vision is shared between all of their outside sellers and ours to drive that value back to the customers and one of those customers is truly a differentiator above the rest. When we partnered with ABC about 10 years ago, it was a growth algorithm for converting vinyl. They created an alignment around that value, and it expanded beyond just the vinyl markets. When our two companies came together, we were faced with an opportunity that we took head on. They had a fragmented position around PVC. It was a owner decision at each individual branch level. Our partnership with James Hardy enabled us, or our partnership from the past as James Hardy enabled us to have that trust and credibility with their leadership to create a solution for ABC Supply that's going to expand into beyond a billion-dollar partnership. Over the course of the past year, we've integrated into their business with a one Hardy exterior portfolio to include our ASEC PVC line. This enables us to get into locations that we wouldn't have formerly been in in the north, where PVC was fragmented and they were using a competitive product. Over the course of the past year, they've consolidated that to one product line. And that gives us that opportunity to reach into vinyl locations that would have PVC on the ground, create credibility with the branch leader, get the trust of the outside sellers, and earn the opportunities to meet with builders that are buying vinyl and PVC by James Hardy Azek, and get that as a conversion opportunity for future fiber cement growth. Our partnership is just getting started with ABC Supply, and we couldn't be more proud of what we've done so far, and we've got more opportunity to continue to drive that as we expand our entire portfolio with their business. You look at the challenges of expanding that portfolio and you look and you see that we have to make this very easy for our contractors to be able to purchase our full line of products. And Color Plus as a contractor was a multiple product line that was purchased by distribution, through the dealer, potentially through a dream collection. And we need to simplify that for an offering that enabled vinyl contractors to sell James Hardy in the home more efficiently and more effectively. So we launched our Statement essentials collection that's 55 skews that enables a dealer to have the on-hand materials of at least 80 percent of what people buy every single day that doesn't take a tremendous footprint but allows them to grow effectively and offer to their customers what they need then you expand that through our partnership with boise into our master distribution profile where we have five locations across the northeast and midwest that have a robust position of over 600 skews on the ground This is same day or next day type of delivery to these dealer partners so that as the customer gets more engaged with the product line at the contractor level, sells a differentiated position to a consumer that wants more than our statement essentials, they have that availability through our two-step partnership and our full extended statement position. And for beyond that, we have our made-to-order collection, which is future products like TimberHue, our dream collection, all enabled through our manufacturing capabilities, sold through our two-step distribution partners and dealers, and giving each of our consumers a differentiated position. Now, as you make it easier to purchase, you also need to make it easier to install. so we enabled a new tactic that you'll be able to see out in the the the pro lab offering in the other room there which enables contractors to be more efficient we've talked on the wall cost for a long time but really to compress it we need to make contractors more efficient and so we've used our teams in technical sales we've partnered closely with our dealers where we are identifying labor and we're using the the contractor and the dealer to create a host site for us to train in the masses how you can more efficiently put hardy on the wall and get the gap to vinyl closed and we do that through our partners at abc our partners at the pro pro channel and then take that over into our trim over method in the field with our tech sales specialists that drive that on the wall cost through efficiency and taking days off the wall with our score and snap technology and only fiber cement can be scored snapped and trimmed over in the way that you will see in the room down the hall that enables us to take days off the wall and when you're taking days off the wall and compressing it against vinyl you now have that opportunity to attack that billion dollar plus R&R market in the northeast and midwest and turn it into an opportunity with single family new construction where you're gaining that throughput at the dealer level that allows our dealers to put all their energy and focus on James Hardy Fiber Cement and Azek Exteriors and TimberTech. I want to use this example with D.R. Horton that takes trim over, the ProLab Statement Essentials, and into real life with America's largest home builder, D.R. In Omaha, Nebraska, our price band was in the north of $500,000 range. We had about 10% of their starts. Under that were their vinyl homes. They had 90% of the market was vinyl, 10% was hardy, but they were struggling to sell their homes as efficiently as their hardy houses. We used our opportunity to introduce trim over, which enabled the contractor on the vinyl side to score and snap, not taking technical tools to the site, calling down numbers. They were able to use a tactic that it allowed them to be more efficient on the wall. As a result, that simpler install, coupled with the increased speed, enabled the cost to be more effective against vinyl. This converted that entire market from vinyl to hardy, and then they acquired a builder named Celebrity Homes that added another 700 homes to their profile. That was a competitive hard siding manufacturer that supplied that particular product to celebrity and as celebrity became part of dr horton that material conversion transitioned into james hardy and now omaha nebraska with dr horton is a full wrap exterior solution by our james hardy's line of products this then creates a wake it creates a price band differentiation you now have vinyl being substituted at a price span that wouldn't have historically been done and as the number one home builder and it gives us that opportunity to create that wake behind it finally a contractor synergy where we have tremendous upside for our future we have over 30 000 contractors in our network those contractors are dedicated to our lines of products this particular example is rps remodeling gentleman by the name of rick james out of northern california he's a long-term james already alliance contractor but his ability to add decking was sporadic once we announced our acquisition and partnership with azac timber tech he quickly added that to his portfolio of offering answering the need of the wildfire or wildland in urban interface but the command demands also of the consumer as he grows his business and what you want to hear from rick is that he saw this as

an opportunity to really drive growth through his business when I found out that James Hardy was coming together with TimberTech I got so excited it just gives me more confidence in offering this complete package in particularly in California because of the fire resistance ratings we can offer our homeowners something that's going to be code compliant as well now they're going to have a product that's going to match ease of maintenance with industry leading warranties we have completely satisfied customers which leads to more referrals and it's really helped our business to grow.

Rick is one of many examples and we're going to do this continuously. We're just getting started when it comes to our contractor conversion and we've got countless examples that this occurs every single day. I look forward to taking this team to the next level and working closely with our product teams, our manufacturing teams and continuing to deliver this integrated sales organization. We've deployed these regional playbooks we're in a position to go out and win and we've got a activated specialized sales force that is the expert in outdoor living and siding and trim to create the demand with our partners pull through solutions with each of our channels members and deliver value every single day to the contractors consumers and builders that we work with thank you for your time this morning i look forward to talking to you more out in the hall.

Thank you. Okay. Hello, everybody. Now we're going to talk about marketing. And before we get into it, I want to share a little bit about my background. I've been, I've spent most of my career building brands and helping consumers make long, complicated purchase decisions in and around the home. And in the last five years at James hardy azek and then james hardy i've seen firsthand the power of what brands do to give customers confidence around that and how we can help use marketing to drive material conversion and growth so the story is pretty straightforward with the brand advantage like that we have the opportunity to expand the way that we think about these journeys and the purchase decisions around home products. So it's not just a marketing story, it's a growth story. We're helping homeowners choose hardy, helping contractors install and specify hardy, and increase our share overall. So the key messages I want to make sure you walk away with today, or I'm going to talk about, first of all is the brand. And the brand creates a significant competitive advantage, as I said. Second, the unified architecture we have built around the brands makes our portfolio easier to understand and more powerful in the marketplace. Third, the localized marketing and digital experiences help accelerate the material conversion and the way that we're able to grow through those two things. And then maintaining our leadership position with the pro is still really critical pros are they are critical to specification loyalty repeat business they're really integral to everything so as I move through the presentation and particularly have a video at the end that'll bring all of this together I want you to pay attention to how all these things relate with one another all these pieces work together so the brand creates the demand the digital experiences and the localized marketing help owner homeowners understand how what it means to them and how to make decisions and then the pros convert all that into projects so before I get into that I want to spend a minute talking about the team you heard John talk about the momentum that timber tech has built this slide represents the team that was responsible for that TimberTech grew in awareness 20 points in five years where our nearest competitor essentially remained flat. That momentum did not happen by accident. We helped create one of the strongest brands in the industry and drove awareness, that growth that outpaced our competitors by in-housing a lot of our capabilities, by building that world-class capabilities in-house across creative media digital experience analytics growth marketing as you heard john talk about we're not using agencies for that we own that internally the people that are driving then owning the brand are shareholders in the company they're understand our customers they're really committed to what we do we've brought all that all those capabilities into James Hardy now. So it's not just about ASEC team joining the Hardy team. What really excites me is that we're bringing the best, the best of both teams to increase the talent and the capabilities, the expertise that we can offer across the whole James Hardy portfolio. So we're really all organized around one common growth strategy. What that does is it makes us more nimble. We're more able to execute faster. We have greater accountability. We don't have the delays of telephone tag between different parties on the outside trying to understand what we're trying to do and move quickly. You'll see some of our strategies that rely on localized, specialized messaging. We're able to deliver that quickly because we have that internal team. Okay, so this slide represents the strategic importance of our whole portfolio. We believe we've defined where the category is going. as you've heard homeowners increasingly want products that combine durability resilience low maintenance long-term value those are exactly the attributes that all of our brands stand for so the home of resilient beauty is not a marketing slogan it's not just a tagline it's actually a strategic framework that brings together what's unique about our products all in one place it brings together what homeowners care about emotionally they want a home that's beautiful and that's built to last and what combining that with what they care about functionally right they want low maintenance they want performance durability confidence that their investment is going to last so really importantly every brand in our portfolio supports that promise so as climate resilience becomes more important as building codes change as we creating a stronger consumer understanding of our portfolio that all gives us a meaningful competitive advantage and by pulling this all into one place as i said it makes it easier for customers to understand and makes our um us just more powerful in the marketplace in a way that really there's no other competitor that has this range and this um breadth of product that delivers against those promises okay so let's talk about the homeowner we see a really strong alignment we've all referred to it i'm just going to hit it more directly between what homeowners care about and the strengths of our portfolio so climate resistance you've heard there's not you know i live in california there hasn't been a fire immediately near me but believe me it's on my mind all the time there's nowhere one in three homes are in a wooey zone i mean this is just the way we live now it's the way it's what everyone is thinking about homeowners also care about long-term value they want to make good investments they care about the design of their home and the curb appeal they want it to be beautiful it's not enough just to be high performance it has to also be really beautiful and they also really care now about outdoor living I was speaking to someone earlier in the in the reception area out there around how people want to live outdoors COVID changed the way we think about how we live in our houses we're not going back we want to cook outside we want to live outside we want our kids to play outside we want to work outside we want to have an outdoor living room this whole idea of living outdoors is really powerful and that's exactly where homeowners are right now what they're thinking about so what's important that these aren't creating sort of headwinds for us all these things are creating tailwinds this is all helping us our products are purpose-built for all the things that homeowners increasingly want and this gives us the opportunity to convert aging wood and vinyl and participate in more of these exterior decisions as you've heard once we create the homeowner preference the next opportunity or the next question is how do we convert it and you heard john and john outline all of the opportunities the billions of dollars of opportunity regionally across the u.s well that requires different marketing tactics to activate all those so the national brand gives you strength and consideration but it's the localization that really is what really converts it um different markets have different housing stock different climate as you know different competitive dynamics all the things so we are able by tailoring our media and messaging to activate in those local markets we create a stronger homeowner buy-in to what our promise is because it's more relevant to them we can't do the peanut butter spread as john says we have to be specific to the right message to the right customer at the right time and with our internal team we're able to be nimble we're able to activate we're able to learn quickly because our analytics are quick we know what's working we know how to um to um to adjust it as needed and we know how to move from a message in the Northeast that's maybe about vinyl or about an upscale product that you want for your home to what's you need in the West when you care about more resilient products yeah I think that's enough on that owning the pro okay now let's talk about the pro so homeowners initiate the product the project but contractors are the ones who are really critical to the specification and to the installation So I like to think of it as we're creating homeowner pull, so they know our products and they're asking for us by name, and we're allowing all of our contractors and customers, dealer customers, to be ready to push, to be there to deliver it, right? So maintaining our position with the pro is very strategically important. And how do we do that? Our goal is really simple. We help contractors grow their business. We help them be more profitable and more successful with all James Hardy products. and that allows them to, or that creates their loyalty and stickiness to us that you heard John and John reference. So that we do that. How do we do that? We do that by delivering better leads, creating stronger match between a homeowner and a contractor by building capability through training and certification and reinforcing that loyalty through our loyalty programs like the board and alliance we've also created efficiencies through integration right so these these programs used to all be separate now we're bringing them all together so now we're even more powerful all together we're aligning training we're expanding education to include the whole portfolio we're bringing together loyalty capabilities and digital engagements getting simpler and easier to access so over time we're creating a more connected contractor experience and the same philosophy applies to warranty to service to support contractors want it all in one place they want one relationship they want one ecosystem they want one trusted partner across the whole exterior and when we deliver that experience we increase their loyalty we strengthen our share of wallet we create a greater sort of material conversion opportunity so it's not all of this adds up these are not just sort of contractor support marketing programs it's actually a growth strategy to be this close to the contractor and maintain our number one position with them this slide is the capstone of my section so this is what really brings it all together so i talked about the homeowner and i talked about the contractor so in repair and remodeling homeowners and contractors do not operate separately. Their journeys intersect repeatedly throughout the whole decision process. And success requires creating an experience that works for both. So for homeowners, their journey is probably familiar to you, right? It starts with inspiration, then they do a little research, and they pick their materials, they find a contractor, and they go through the project, they agree on that, and they move forward, and eventually they recommend that to their friends for contractors it's a little different but similar it starts with a lead generation then specification and purchase and installation they go through warranty and advocacy at the end but their their journeys intersect consistently throughout that so digital is what connects those journeys so things like inspire like a inspiration and education through digital means visualization tools are really important um contractor matching guidance and education it's one of the most highly researched categories anything around the home and by delivering all of that giving the customer that information to take that next best action is really really important because if you think about it when a homeowner is more informed and they understand the value the pro has a better lead better chance of closing When the pro is more equipped, homeowners have more confidence. They feel more good about the decisions. They have an easier time sort of making these decisions. So a lot of that friction that John referenced gets removed if you have a really strong digital journey. As I like to think about it, they're consistent and mutually reinforcing. So we spend a lot of time here because removing friction here is really an unlock. It's really a key to how we grow and how we unlock more opportunities. for all of our products across all of our customer sets across the full portfolio so now i'm going to bring this together in this video and as i as you watch this what i want you to pay attention to is so is how the themes that we've discussed kind of come together here so you're going to see the importance of trust in in for the homeowner you'll see what resilience and durability and low maintenance and long-term value what that looks like from a homeowner's perspective. And you'll see the role the contactor plays in guiding the homeowner through this process and how the digital tools and education, you know, help create this confidence along the way. And this is exactly what we mean by material conversion. It's really about helping homeowners make better decisions and helping contractors deliver successful projects.

Our home is finally going to look the way that it's supposed to look and it's going to look that way for a really long time james hardy products are so solid they just really last and it was like coming home to a brand new home i recommended hardy siding as soon as i came to this house the low maintenance pest resistant fire resistant product the homeowners wanted that cottage feel so we added azac molding on the top of the windows to give that look that they wanted once we heard about timber tech decking that it was low maintenance cool to touch looks like real wood we jumped on it having timber tech decking hardy siding and azac products under one roof made everything so much easier the fact

that we can mix it all together i'm able to offer the complete package the vision that i had in my head was perfectly executed you always have to look at your house as an investment 10 years from now 20 years from now the value of our home is going to be retained because of the durability of those products james hardy the home of resilient beauty okay so i'll close where i started the key takeaways are pretty simple we have the best brands and those brands represent a significant competitive advantage we're accelerating the demand through the unified brand architecture that makes everything easier to understand and more powerful we're driving the material conversion through localized marketing and digital and we got to maintain our number one position with the pro what really gives me confidence is our ability to execute in this with the combined team and all of the talents and deep expertise we have around that team and how all those things work together. So now I'm gonna bring up Bill. Thank you for your time.

All right we're running a little behind schedule so we're gonna make an adjustment to the schedule. We'll start a break right now, be back by 10 35. The team's gonna be out there to answer questions as well. So yeah be back by 10 35 and of course we've got a longer q a at the end of the day so thanks all right good morning

welcome back from break everybody i'm ryan kicullen uh ceo of james hardy uh happy to be here this morning and walk you through our operations update a little bit of back about myself before we get into it uh been with the company for 19 years i started as a pretty junior engineer my first job was a night shift supervisor on one of our fiber cement production lines i'm pretty excited to talk to you about making fiber cement today uh i led past couple years i led some of the larger transformational efforts in our operations our lean manufacturing implementation a lot of the foundational work in our supply chain my last role i was evp of global operations and led the implementation of the hardy operating system into our international business units uh and then a year ago stepped into the coo role uh with the with the acquisition of asic and honestly the last 12 months has been the highlight of my career so far and i'm really excited to show you the capabilities it's brought us what our teams uh what our teams have accomplished i think more exciting what's what's in front of us um before i jump into that i wonder i thought coming back from break it'd be useful to put put this section in context from what you just saw from from my colleagues uh so you guys just saw uh sam really bring our brand to life she does an amazing job at that one of the things you hear so loudly in our brand is the confidence in our product performance okay and that comp the source of that confidence is really directly in the expertise and the ip that we own in our manufacturing and r d organizations and you'll you'll see that brought to life here uh secondly you heard you heard mattson talk about winning with our customers okay we we enable that in operations with a really unique advantage and our local supply chain as well as a lot of investment in the technology that helps us directly integrate with our customers so see that and you also heard skelly talk about the really exciting addressable market that sits in front of us okay capturing that share takes capacity what you'll see is we've already invested ahead of that share capture with capacity and we've got plans in place to get more out of what's already on the ground okay that'll be a good segue i'll lead into ryan who will ryan lateral talk about how we translate the hardy operating system uh and those incremental capacity gains into margin improvement and free cash flow. So that's how this fits into the day. I'll make those connections as we go through here with these four key messages. One, we've got two really significant structural advantages in our operations, our local supply chain and the technology that sits inside our factories. Next, we've got the Hardy operating system. You guys have heard a fair amount about that already so far, which is great. What I'll try to do is bring that for life. that's our productivity engine and when i say productivity engine what you should all hear is margin expansion and inflation offset okay so we'll bring that to life and then finally we've got capacity on the ground to support the growth that john and john talked about and we're going to deliver more out of what's already there through our advanced manufacturing program before we get into the operations i want to start with our most important foundational value in the company okay that's zero harm zero harms our safety culture is how we describe our aspiration to have a zero incident work environment okay you can see one way to one way to talk about how good yard safety is to measure yourself to peers you can see we benchmark very favorable with significantly fewer incident frequency than peer companies in the space that's important what what really matters here for us uh is that this is about a commitment to our people you saw john and john talk about the incredible people on our commercial teams you'll see more about them in operations. They deserve to work for a company that aspires for zero incidents. And then finally, we just think that if you want to consider yourself a truly great industrial business, you've got to prioritize safety excellence. And we firmly believe we belong in that category. And this is really important to us. So with that, we'll start clicking into the operations here. Here's a setup slide with our operational footprint for North America. You can see 26 factories that either make product or recycle material into stuff we make out of product. It's across the full portfolio, decking, railing, siding, trim across the U.S. We'll double click into each of those networks here. I want to talk really specifically about the 4,500 operations professionals that work across our business. This team's incredible. They're passionate. The brand that Sam talked about, the brand promise, they take that personally. They're also continuous improvement zealots. So there's a lot they have to be proud of, of what they've accomplished over the years. And you'll see some of that here. But at the same time, they wake up every day trying to win the day, trying to make the place better. And a lot of what we try to do with the Hardy operating system is standardize the way that those teams work so we can get them working together and connected when we do that well they can really move the needle quickly and we'll show you a couple examples of really great results from that team okay and then finally we're showing try to give you a sense of scale of what this network actually looks like uh when you're inside it one of the ways to do that is to talk about what it would cost to replace it so if you if you rebuilt this network new at today's cost it'd take about eight billion dollars to rebuild this factory network okay that's that's you know gives you a sense of scale from a competitive lens also it gives you sort of uh you know the the daunting figure that would be in front of you if you tried to replicate what we have i think what makes this figure even more daunting is that would just get you the factories okay not the significant mountain of ip and capabilities that sit inside those walls okay and so that's a that's a good transition to how we'll start to talk through some of the differentiated capabilities that exist in hardy operations okay we'll highlight i'll highlight three of them here our localized supply chain our proprietary manufacturing technology across both fiber cement and our decking platform and then our continuous improvement engine i think each of these you know independently are pretty significant what really differentiates us in building products is our ability to put all three together and do it day in and day out and that'll come through over the next couple slides we'll start so we we we describe and this example is is our fiber cement network we we describe our supply chain as being a local supply chain uh advantage okay so what does that mean most building materials companies when they when they decide where to build a factory they're stuck with a choice do i build it near raw materials or i build it near the market no matter what they choose what they end up with is typically a pretty long and complicated supply chain they compensate for that by pushing costs to the customer so long lead times excessive working capitals stringent mixing rules and how you can order from them okay within our fiber cement network we don't have to make that choice okay so the vast majority of the weight of the product that goes into fiber cement is available in free supply at high quality across the whole u.s Okay, so we're free to choose to build our factory wherever we want to. And what this slide shows is where we choose to build factories is right in the backyard of our customers and right down the street from our suppliers. The result of that is there's a couple of structural advantages that that creates. Now one is proximity, which ultimately for a customer means we're simple and fast. Okay, you heard Skelly talk about industry leading lead times in service, where 90% of factories are a day away from the customer 75 of the raw materials are right down the street within 150 miles are we are very very responsive to customer demand secondly we're flexible without giving up efficiency okay so our products can be made at all factories uh across the u.s we don't put stringent mixing rules on customers customers can transact with us in a way that works for their business and how they're driving their needs we take so those are two pretty important structural advantages and we double down on those with a really strong integration approach to our customer supply chain so we've invested in technology hardy link is an example that's a portal that all of our customers interact with us we've got internal supply chain technology that we use to optimize this network and then we have organizational integration so you saw all the logos from Matson's presentation of our customers, a number of those large customers we would have dedicated supply chain teams that wake up every day and do nothing but thinking about how we enable those customers to achieve our to achieve their objectives in our network. Okay, and so that that creates that combination of real structural advantage and then an integrated approach to supply chain management creates a really durable advantage in our in our network. We go from the network and now we'll drill in uh inside the four walls of the factory and talk about the proprietary manufacturing advantage that we have in in fiber cement so the sort of the punch line here is that we own all of the significant technology associated with making fiber cement in a high throughput high product capability environment we own all of it you can't find fiber cement factories that look like ours anywhere else in the world certainly certainly nowhere else in the in the u.s the the source of of that differentiation a lot of it comes from just decades of really deep organizational expertise okay so you can see up there we've got over 150 central scientists r d professionals engineers outside of day-to-day manufacturing that do nothing but wake up every day and think about how do i move the fiber cement manufacturing and technology platform forward. That is really deep focus and expertise for a single product line, single manufacturing platform. What do you get from that is probably the question. So one example is a significant scale up in the throughput of a fiber cement sheet machine. So from the time the company came to the US to now, there's been a massive scale up in the technology. One of the easiest ways to bring that to life for you is talking about the most recent factory we built in Prattville Alabama okay that that plant will produce when it's fully ramped will produce over a billion dollars a day worth of revenue sorry a year day would be really big of uh we're working on that we're working on that a billion dollars a year of revenue under one roof okay that that's a really really high scale factory a really unique level in building products okay another way to think about the capability and the advantages that that expertise has produced is you saw a lot from John and John, the regional approach and how different regions in the U.S. have different climate requirements, different product needs. Okay, we're able to engineer our product in our factories from a formulation and process engineering standpoint, customized to those regions with very, very few changeovers and inefficiencies. So, on the same machines, we can make product specifically engineered for different markets, and you wouldn't really notice it if you were in the factories watching it run and change between those products. It's hard to describe, you just got to trust me, that's really, really hard to do with fiber cement. It's taken decades to build that, and certainly nobody else in the U.S. does that. So that's decades of expertise that we've turned into really durable advantages in technology inside of our factories. If I shift gears into decking, our decking, and talk about the technology that sits in our decking plants, our decking plants are modular and flexible, the production lines that make them. We're able to get product, it's a high changeover efficiency process. You saw the innovation from Skelly's presentation. We're able to go from innovation to the market very quickly with our ability to move things in these lines. you also saw from john's presentation the the good better best positioning our our success at the top end of that a lot of it comes down to our ability to mimic the look of high-end real wood okay and that capability exists in pretty unique places in the timber tech decking factories it's taken years to build and then finally you've heard a lot about pvc decking today you're all experts on wooey now i think and fire resistance and certainly we are years ahead of competitors when it comes to the ability to deliver pvc product that performs like that across the u.s next we'll shift into recycling which is a really key component of our decking operations and exteriors uh one thing to think about that we you guys are very aware of the sustainability uh element of recycling on this slide i'd ask you to think about it from a cost lens so the biggest cost inputs to composite decking are the raw resins like pvc that go into it our ability to use to replace that raw resin with recycled content is really important for our continued margin expansion it also provides a buffer those those commodities are pretty volatile so it provides a an inflation buffer um and uh the the challenge with using recycle as a lean manufacturing is you get a lot of variation from recycling okay so being the largest vertically integrated PVC recycler in the country means we have a lot of control over that variation and we're able to do lots of things and how we source it process it and then run it through the factory that allows us to make really high quality product with recycled material and gives us a lot of confidence that we've got a really long runway ahead of us to continue to increase the percentage of recycled content in those materials we have a great team on the recycle side many of you probably met Dave he's out there talking to he's not shy so if you want to learn more about recycling go talk to Dave he'll educate you we've got a team of experts on that hardy operating system this this is a really important slide for us you you've heard it a number of times throughout the day so I'll park here for for a couple minutes on it you heard about I've just describe some of the the the really um structural advantages we have in our network and technology those are great i think the most exciting thing about this business is the runway in front of us so across all manufacturing platforms in our supply chain there's significant headroom to improve our productivity and again when i say improve productivity you should all think margin improvement cash flow and so hardy operating system or horse is our productivity engine it's how we do that there's four main value creation levers they're up there lean manufacturing procurement excellence that's how we buy a product buy efficiently formulation value improvement and supply chain efficiencies and i'll bring a couple i'll bring a couple of them to life uh starting with lean manufacturing or what what i'll probably call h moss which is what we call it internally um before i get into that example there a little about how we think about a lean manufacturing process isn't just a bunch of buzzwords okay it's how we operate and to give you a you know bring that a life to for you a little bit i want to talk about our daily management system so it's 11 o'clock in new york okay that means by now we've executed our tiered daily management system at all 26 factories across the u.s okay it started at 5 a.m our leaders went out the floor they understood what happened on night shift and then we've executed three standardized tiered meetings where every level of our factory has already talked about what their plan is to win the day okay and at hardy winning the day means achieving their productivity targets okay and that as those teams achieve their productivity targets across the 26 plants that rolls up to our network productivity target that delivers margin expansion okay so this is not a bunch of buzzwords this is how this team operates they're relentless they do it every day and it's what drives really significant operating leverage and improvement across the business an example of that to bring to bring to life uh it show we show a chart that describes the progress we've made uh in our fiber cement plants on oee are just kind of your highest level of productivity measure in the factories pre-lean we show you where we were uh for the for the six years following lean implementation we improved our oee and fiber cement by 14 percentage points okay that's really big improvement and a network of this scale and again back to this idea of this is a proven productivity engine with lots of runway we've got a similar level of improvement opportunity still in front of us in fiber cement. We think that's really exciting. Another part of Haas to bring to life is our product reformulation value improvement. Here we've got teams between the product management group, R&D, process engineers that build long-term roadmaps and how we reformulate our product to give the same performance at lower cost. The magic of Haas for us is we're able to take those roadmaps with that deep expertise and then break it into small pieces that we run through our factory. And the team's able to achieve lots of small improvements every day that add up to big change over time. So we're pretty guarded with our formulation secrets, but what I'd tell you is we've got a really big runway ahead of us, particularly on the decking side, on how we can continue to take cost out of our product to offset inflation and drive margin expansion. So that's a bit of our hardy operating system brought to life. Another way to show you the highlight of this, and this is why I say that 12 months has been one of the highlights of my career. This has been awesome to see the two teams work together, the Legacy Hardy and Legacy ASIC, to implement Hardy Operating System into the legacy business. You'll meet our two manufacturing leaders, John Ashworth and Scott Van Winter. their teams are working together and doing an incredible job implementing lean manufacturing our procurement and supply chain best practices and reformulation efforts into the legacy ASIC business lean's been a pretty new concept in ASIC and their teams have just fully fully bought in and embraced it and that's one of the big reasons why when when Ryan gets up he's going to talk about our you know being ahead of schedule on our cost synergies and our confidence that that's an engine that's going to keep going these guys are on track to deliver over 50 million dollars in synergy savings i think they're just getting started so that's been really fun the teams are super energized and i'm really excited to see what they continue to do with bringing h hoss to life in our legacy asic network we'll shift gears a little bit here as we close and talk about capacity so as i mentioned we've got ambitious growth plans that requires capacity ahead of those share gains we're in a really good position with investments we've already made ahead of those share gains we show you the utilizations there you can see 70 on the fiber cement 65 and decking and 60. we've already got assets on the ground ready for that growth and a fair amount of that opportunity to continue to increase utilization sits in brand new state-of-the-art facilities So I already talked about the Prattville plant and then our new state-of-the-art decking facility in Boise, Idaho, which is an ideal position to support the growth you saw from John and John in the western part of the U.S. So we're in a very good spot on capacity. We're ready to enable that share growth without the need for near-term investment. And lastly, I'll close with, I think the most exciting part of this is also not only do we have capacity on the ground, we've got to plan to get a lot more out of that capacity. And so this is our advanced manufacturing strategy that we're in execution mode on. The punchline is we see an opportunity to step change, increase the line speed of our fiber cement manufacturing lines. As we started to execute HMOS, those lines are showing the sprint potential to go at faster speeds. And now we've built a team and created a plan to implement technology into those factories to allow us to sustain at those sprint levels. As we do that and realize that full potential, that'll deliver a billion dollars, the equivalent of a billion dollars' worth of capital offset out in the future. the teams are doing we got a ways to go the teams have done really good work we were up five percent already in line speeds over the last 12 months and I'm really excited to see where this keeps going so that's that takes you to the close I'd summarize I'd summarize our hardy operations we've got real structural advantages in our local supply chain network and the technology that we've built over decades with deep experience on top of that we've got an asset base of eight billion dollars that we've already invested in we've got a proven productivity engine in haas that drives margin expansion and cash flow and lots of headroom to keep going and then we've got the capacity already in place to support the share growth you saw from john and john and a plan to get more out of what we've built so i told you it's been the highlight of my career working through this integration with these teams they're just getting started a lot headroom to go and and what that'll turn into is continued margin expansion uh and free cash flow and that's a good transition uh over to ryan we'll take you through the train through the financials thanks appreciate it well thanks and good morning everyone uh thank you for being here today thanks

ryan for the handoff i'm going to connect the story you heard today to the financials from our competitive advantages to our commercial initiatives and synergies and to the scale and leverage of our supply chain and manufacturing and why we believe these will help us generate sustained growth cash flow and returns let's get into it so five key messages i want you to leave with today our execution is driving above market growth and the housing recovery would only add upside to this two the azek synergies are delivering commercial is on track and cost is head of a schedule three we are generating strong free cash flow as a business this funds a clear leveraging path and provides us capital allocation optionality for the growth algorithm drives sustained market outperformance and regardless of housing cycle it still works we believe this is a compounder model poised to generate strong long-term shareholder returns let's begin with the market backdrop to aaron's point earlier we are not assuming a housing conditions improve in our algorithm but the setup is more constructive than the mood suggests in new construction starts have been below the 60-year average most of the last decade with strong stretches near trend this shortage in housing is a product of a decade plus of under building versus household formation we're not counting on a snapback story but we believe rates and affordability will help set the pace of recovery structurally this could be a multi-year tailwind not in our algorithm next the u.s housing stock is aging roughly half of the homes were built pre-1980 with a meaningful share carrying 30 year old plus vinyl siding that's ready for repair and remodel at the same time elevated mortgage rates create a lock-in effect owners are staying put not trading up and but investing in their property this can be seen in the rnr growth and resilience even through the cycle troughs in 2015 277 billion was the rough rnr number the last five years have been north about 500 billion and we expect that to continue what's unique about hardy setup is we win both ways. R&R continues to deliver now, and when new construction returns, it's upside. Let's move to synergies, starting with the commercial side. As you recall, our target of 500 million of commercial synergies recognized over five years through the portfolio combination of James Hardy and Azek. We are on track to reach at least 125 million exit run rate by the end of full year 2027. On the activated side, the recently announced Boise Cascade and regional distribution agreements, provide meaningful steps towards that target, and build upon previously announced Lansing and CBUSA deals. The forward-looking pipeline is just as tangible. As John Mattson discussed earlier, we continue to expand coverage in one-step dealers, builders, contractors, independent lumberyards, and retail. In new construction and multifamily, where a lot of runway remains, we are expanding deck rail and accessories. Internationally, we're preparing to introduce decking into the Australian market. Switch gears to the cost side. We were targeting 125 million of cost synergies over three years, and we're excited to update you that we plan to exit the full year run rate of 125 million by the end of full year 27, which is one year ahead of our original schedule. From a cost to achieve perspective, we are under budget, and we did not sacrifice service or execution quality to get there what's remaining is you heard the team talk about earlier but deploying hardy operating system into our asec plants leveraging our procurement at scale across our global business and then system consolidation that makes us more effective we will continue to update you on realization turning to cash flow over the years we've made heavy capacity investments which have positioned us well for future growth capex as a percentage sales was 10 percent in 2025 roughly 7.8 percent in 26 this year we're estimating six to seven percent for 2027 normalizing in the six to eight percent range in the near term as ryan discussed earlier our plant and equipment is substantially in place we do not expect any large new projects in the near term and we will work to optimize our current state through advanced manufacturing. For free cash flow, the full year 26 dip to $425 million was driven by roughly $207 million of deal and integration costs that don't repeat. Our full year 27 guide expected roughly $500 million of free cash flow. We are raising that target to roughly $600 million plus now based on the cash the business is generating this year. From a conversion perspective, you can see 26, we are roughly 30%, jumping up to 38% this year, we anticipate 40% plus moving forward for free cash flow conversion. Before I turn to capital allocation, I'll spend a minute on what Aaron highlighted around our EU business. We recently announced the divestiture, which is a full exit of our European business that involves selling our fiber gypsum business and closing down the EU fiber cement business. The agreed sale of the price is roughly 980 million on a USD basis, which represents a 12x multiple on 2026 EBITDA we expect the deal to close in the first half of 2027 in the interim Europe will move to discontinued operations beginning in Q2 2027 our guide is also updated to reflect this we expect this divestiture to be accretive to the overall margin by roughly 150 basis points and we plan to use the proceeds roughly 600 million for debt pay down and roughly 250 million share repurchase which was authorized by our board of directors in august this directly accelerates deleveraging while sharpening our growth and return profile on that note where does the free cash flow go this is the priority order of our capital allocation funded by the strong free cash flow we are generating first we will invest in organic growth this will fund sales initiatives product innovation and channel expansion you heard john and john talk about earlier second we will continue to deleverage our target of 2.4x by the end of the financial year 27 and under 2x by 2Q full year 28. We will accelerate this using the $600 million debt paydown that we discussed related to the EU deal. Third, we will provide shareholder returns through opportunistic repurchases. We are currently authorized to execute a $250 million buyback once the EU deal closes. Finally, fourth, we will look at bolt-on M&A via our structured playbook once we hit our leverage target. This is a clear, disciplined capital allocation framework that we will apply consistently as we generate more cash. Now, let's walk through our Q2 and fiscal 2027 guidance. Note, just as I mentioned earlier, this consolidated guide now includes Europe, which is moving to discontinued operations. We are reaffirming our Q2 and full year 27 guidance, but we are raising our free cash flow guide from 500 million plus to roughly 600 million plus, given our strong free cash flow generation. As discussed, our guidance does not assume any macro housing recovery, and we remain cautious on housing until we see key indicators meaningfully improve. In addition, we've seen no relief on fundamental costs, including freight and diesel. We are encouraged by our initiative traction, we are driving material conversion, and we are realizing our synergies. The demand for our products remains strong, and we are focused on executing and driving above market growth. next our growth algorithm that aaron touched on earlier this is it this is the engine behind everything we've walked through the north america target is roughly four to seven percent organic growth above the market built on three levers the first lever is material conversion as a rule of thumb one point of conversion equals roughly four percent of growth for the industry this has been a durable multi-year contributor for our business we expect to continue john john discussed earlier but we have a long run rate of conversion ahead of us across our portfolio second lever is the product of our growth initiatives and the 500 million dollars of revenue synergies you heard us discuss third lever is net price realization this is based on the strength of our value proposition across our portfolio and is supported by a multi-year history of price value-based increases together we expect roughly four to seven percent growth above market with a 35 plus adjusted ebitda flow through this does not underwrite or rely on a market tail end to work outside the core stack both on m a and any housing recovery add upside so let's review what this means in three scenarios that test this this is not tied to a specific year rather the positive impact of growth on our financials. This is for illustrative purposes only and is not intended to be our full-year 28 guidance. As a reminder, the full-year 27 estimate is the midpoint of our guidance, excluding Europe. We use three market scenarios, down 1.5%, a plus 0.5%, and a plus 2.5%. Our market definition is based on roughly 60% repair and remodel and 40% new construction, which includes single-family and multifamily. Our above-market outperformance is held constant at 5.5 points, which is the mid-range of our 4% to 7% outgrowth. Our EPS benefits from margin improvement, debt paydown, and share repurchase. Assumptions include roughly 35% EBITDA flow-through, roughly 40% plus free cash flow conversion, roughly 22% tax rate, and 580 million shares. for eps this also assumes 600 million of debt pay down at a 5.5 blended rate and 250 million of share buyback at 31 percent what this model generates at uses assuming the mid case at 0.5 market we see six percent sales growth with margins expanding roughly 60 basis points this outpaced sales growth while improving free cash flow roic and eps there's upside to this model if there's any outperformance to the mid single digit range we highlighted. This does not include any additional bolt-on M&A we may choose to do, and this doesn't include any incremental debt or share repurchase outside of what we've already announced. Even in a down market, we can deliver sales growth, margin expansion, and improve free cash flow in ROIC. That resilience across markets is the core story, but there's other catalysts that could help have a positive impact. Index inclusion is a positive benefit worth touching on. We became a U.S. domestic filer in April and filed our first 10K in May. This opened the door to U.S. index inclusion. As you know, index ownership is where a meaningful pool of incremental demand exists. An average of 23% of S&P 500 shares are held via U.S. index today, and only roughly 2% for James Hardy. We are encouraged by our early wins. We are now in the MSCI small cap index, as well as the S&P completion index as we move forward we believe we have an opportunity to be in the S&P 400 mid cap as well as others which brings me to where this leaves the stock we believe our growth and margin profile sets us up for multiple expansion over time this chart is a simple comparison of three year average EBITDA margin to valuation versus a group of peers this peer group includes building product players and what we consider best-in-class industrial peers we've maintained and grown margins through the cycle and believe we have a meaningful opportunity to continue to improve margin and to close the valuation gap which we intend to do through sales growth margin expansion deleveraging and disciplined capital allocation now bring this back to where we started the five key messages we are reaffirming our guide executing above market despite the macro and a housing recovery only adds upside that we're ready to capitalize on. Two, we are delivering on our synergies with cost ahead of schedule. Three, our business is generating strong free cash flow that'll allow us to deliver quicker and gives us capital allocation optionality. Fourth, our growth algorithm is resilient and outperforms across housing markets. Putting this all together, durable growth, expanded margins, strong free cash flow, disciplined capital allocation, and a valuation that hasn't caught up, we believe we have our compounder model set up to deliver strong long-term shareholder returns. Thank you. With that, I'll hand it back to Aaron to close us out.

Thank you, Ryan. Okay, we will quickly close out and get to Q&A. Hey, a couple goals that we had here for today is to have you all walk away with understanding our strategy. Then second is having confidence in our strategy. And then third is that we have the right team to be able to go out and accomplish that strategy. We are understandably very, very confident in our ability to be able to go out and do this. And I think we have some proof points here as one company since we've been brought together. We've made a lot of meaningful progress over the last 14 months. Certainly, as you look at our track record on what we've been able to do on revenue synergies, which we're just getting started on, feel very confident of. Achieving our cost synergies a year ahead of schedule. Setting up our footprint and the right cost structure. We're on the right path as far as deleveraging the business. and certainly our ability to focus on the areas where we have the right to win and make the tough calls. And I think we did that and exhibit that by what we're doing with Europe. Again, I started out by saying this. The last 14 months, we've done a lot. This is working. This is working, and we have a long road ahead of us. So that's what gets me excited, and hopefully all of you as investors get really excited about this and i think you should get confidence that as we look at two separate companies azac was able to outgrow the market james hardy on our long stretch we have been able to outgrow the market and now we're putting two teams together that have a proven track record with enduring competitive advantages and that's why when we think about why to invest in James Hardy you can see this investment thesis here you know obviously we talked about this but we're not cycle dependent you know what's going on right now and certainly we've proven that we have to prove it quarter after quarter but there is enough opportunity for us to go out and convert the market with our resilient beautiful products we have enduring competitive advantages I've said this over and over but any company would love to have one or two of those. We have multiple ones, which makes it very, very hard to compete with. Ryan just went through it. I talked about it. We got a growth algorithm. Think about it as a diversified portfolio where we're going to outgrow the market 4 to 7%. And then there's upside to that as we think about certainly the optionality of having bolt-on M&A, but also you get a little tailwind from the market out there. And we continue to improve the profitability of our business. Ryan just talked about the efficiency and our reduced capex spend. We're going to continue to be able to generate a lot of cash. And that brings optionality for us in what we do with it, including returning to shareholders. And then I think the thing that gives me the most confidence is the speakers you heard from here today right their ability proven track record to go out and execute right this truly is a new James Hardy and it's a new James Hardy and a better James Hardy because we brought together the best of both and I think it's exhibited by our team not only here in the room but who you're going to interact with out there so look I'll start out or end with what we started out with and really is the theme of this day and the thesis behind bringing the two companies together is we're built to outperform resilient by design. So thank you. Appreciate the time. We'll now move into Q&A here. So ask the team to come on up and give you all a chance to ask. You always get to ask Ryan and I questions.

So it gives you a chance to be able to talk to the whole leadership team here hopefully that's my chair chair guy we have enough chairs here I got one coming oh you got it zero harm bill all right okay so we have some mic runners so please raise your hand just one note on the webcast for those people that are on the webcast there's a portal to ask a question we'll cut we'll filter it through and they'll send me the question up here. All right, let's go in the front. It's Trey.

Thanks for doing this. Thanks for all the info. This has been great. Aaron, I know you didn't want to get into the super granular around the growth algo, but if you look at the historic market outperformance on both sides of the business, and then you look at the revenue opportunity, synergy opportunities, four to seven looks pretty conservative so maybe if you could any any details you could get around or give us around you know what could get us to the low end versus the high end or even above the high end of the range of four to seven yeah thank you appreciate the question look first of all i i think any company to be able to grow in uh in this building product space of four to seven

percent would be having a pretty good year to outgrow the market four to seven percent with that said there certainly is opportunity to outgrow that right when we think about having you know bolt-on acquisitions we you know have some of our growth stack perform a little better than others what we wanted to present to you and is to be this is something we think we can do no matter what the market uh delivers to us and that gives you confidence on consistent performance we've talked about this before this is something that azac regularly was able to do james hardy absent the last couple years was able to do consistently so we feel very confident in what

we put out there okay let's go to the other side here i can't yeah michael hi mike rehart amelius research thanks for the presentation you know the the question I guess on the commercial synergy opportunity you outlined by region by you know home builders and markets is there a way to think about maybe from a let's say a disproportionate perspective either regionally where you see the greater opportunity that 500 million and I'd also love for you to dive into the 750

million home builder opportunity because i know historically azac was kind of underrepresented as the industry was in the new construction channel yeah i'll i'll start out and then i'll send it over to to john and john here look again i'll just reiterate we're very confident in that 500 million i say 500 million it's really 500 million plus and i think the team laid out a good sampling of where we're going right you know certainly as we think about the Boise cascade you know alignment also a regional distributor alignment that is significant synergy opportunity and that really spans across the whole United States out there I think John or John had it up there but when we look at from a segment standpoint certainly we see a tremendous amount of opportunity of leveraging some of the hardy relationships and with contractors with two-steppers with one-steppers to be able to get timber tech and azac in there and we have exhibited that but just as much we see the opportunity and being able to get james hardy you know i think some of the two-step regional distribution is a perfect example of that some of the lumber yards in areas like the northeast east and the midwest are perfect examples of that so i would say it is nationwide and it is pretty

well representative for each of our product groups but john john you want to chime in here and then talk about the regional building opportunity yes i think it was well said aaron um when you look at the northern markets azac timber tech had really good penetration in those marketplaces where we're still emerging as a fiber cement manufacturer at the same time in those northern markets there's also really strong independent lumber yard partnerships with timber tech and azek and we have from a fiber cement standpoint very strong partnerships at the one step you go to the south you have the inverse of that very strong penetration from a fiber cement standpoint and a lot of growth opportunity against pressure treated wood in the south underpinned by really strong partnerships with the volume lumber yards and independence as well so as we look at this we create the value on that side on the north with more opportunities and independent lumber yards that reach both single-family new construction and rnr and then specifically in the north against vinyl it's truly a partnership with the one-steppers and our azek product line to give them a good better best portfolio as people graduate from their first home through the re-side of their existing or long-term home. So that's where we feel that there's a ton of strength through our two-step partnership, their reach to independent lumberyards, our partnerships collectively with the volume national partners, and how we take that and pull it all the way back through to include retail, where James Hardy Fiber Cement is well established in the retailers, and we're emerging with timber tech between both retailers you want to cover the regional home builder yeah absolutely um and when you look at the 750 million dollars of regional home builder activity we have really strong share within the top 300. the top 300 is anybody over 100 homes annually when you look under that 100 homes annually there's so many different uh single family opportunities with those home builders where we have our trim over method plus our full portfolio enables a one hearty solution that allows that regional home builder to compete with the nationals and differentiates them from that. And our teams are built to deliver that with each of those types of builders and or contractors on the smaller scale and the large scale through national accounts or with the infield team.

I think one of the synergies that we've had up there before that really supports what john's saying is our alliance with cb usa was which is the largest uh you know regional home building buying group out there the other thing just to build off that when you think about one plus one equals three is these regional home builders a lot of them are shopping they're you know they're getting their materials in places like lumberyards which azac has traditionally been very strong at right it also has access to those contractors so that's an example of the synergy you know that azac is bringing james hardy you know kind of to tie your whole question back together thank you all right let's go keith here be mad at uh bill because i'm not calling on anyone it's him thanks it's keith use from truest um just doing some rough math on your margin gain It looks like maybe 35%, 40% contribution margin on the forward view that you gave. That's a healthy number, given what the capacitization of your presentation, Ryan. That seems like another kind of conservative number. Is that fair? Is there something else going on that I'm not thinking about that keeps it lower?

Yeah, I mean, I think if you look at the averages of the businesses, we always saw fiber cement kind of in the low 40s on incremental volume. On the DRNA side, it's kind of that 30% to 35% range. so we kind of brought those together in a blended rate of 35 percent yeah there could be incremental to that but we figured in almost any environment on the flow through we can achieve that yeah absolutely with where we are from utilization perspective that leverage on our fixed costs you know you can take that all the way up through the utilization range hey tim weiss from baird thanks for all the detail um maybe just looking at the just kind of the vinyl kind of r and r and kind of recapture opportunity i think the average lifespan of vinyl

is about 30 years and if you look at the census data it seems like you'd almost be kind of just entering that replacement cycle i guess would you agree with that and and how would you kind to track that opportunity or present that opportunity to us because it does seem like there's a pretty sizable you know basically from the mid 90s to the mid 2000s of installed vinyl that has has yet to really convert tim have you been listening to us for the last year this is this is what i'm just kidding but this is this is really what we've been talking about you know really uh primarily over the last year is our largest opportunity right and some of the stats we put out there support exactly what you're saying when you think about

the aging housing stock you know you have this many homes 20 to 40 years old right so they fit in that sweet spot of what you're talking about and then since the 90s I think over 10 million homes clad in vinyl so that's why we see this as a tremendous opportunity we saw it years ago I think that we finally are are bringing together right you know the right product proposition uh being able to reduce the install time so we're decreasing that differential between us and vinyl and then on top of that being able to have some of the support and key regions that have been vinyl regions that we get from the azac acquisition not only people access to contractors but also access to customers so we are at a great time to be able to go out and get after that and that's why we list this is our number one opportunity we think northeast midwest it's a billion dollar opportunity you know john was just talking about for the you know the team we have objectives that are more locally focused right versus hey we're going to do this across the country and you know northeast and midwest you ask some of our sales team out there and what they're going on it's how are we going to displace vinyl so we are set up the right way to be able to get after that and you know as far as how do you track it how do we know we're winning on some of our earnings calls right we've talked about you know some of the the reach we've had with trim over right how many homes you know the percentage increase and we'll continue to do that so we're making good progress but I think the thing that is really encouraging is we're in our infancy here and being able to go out and get after it you may ask well why why didn't you get after it before look from a james hardy perspective we had a tremendous amount of opportunity in certain regions of the country to really get after new construction and we'll take that all day long and we've been very successful with that now as we look at okay what are other opportunities for us as a new james hardy you know repair and model in some of those regions of the country are top of mind and on a on the growth algo just is has anything changed on the net pricing contribution relative to what the organization has done historically look we we usually say roughly two on you know we think of drna and we think you know north of three uh on fiber cement but it goes back to what i said before is some years you know these are going to be different each one of those growth stacks um you know right now that is our thinking is that we will target that but i think it's to look at the the growth algorithm in totality here of that four to seven percent okay great great job guys uh filling from

jeffrey's uh ryan uh the uh presentation of operations was really impressive the two things I wanted to really tackle was on the speed pick up five percent for fiber cement aspirationally call it three to five years what's a you know good target would that require a lot of capital and the other piece I wanted to really tackle on is the reformulation piece right is there an area to kind of reformulate you know fiber cement in particular to kind of reduce install cost right I mean the changeover method was really impactful but is there opportunity to kind of reduce that install cost and really open the TAM and go after that PVC market thank you yeah sure thanks the um let's take i'll take the first one uh line speed the

question was line speed fiber cement kind of what's it what's a three to four year uh view of that is that the question yes yeah okay so i think um uh and and and then the second part of it was how much capex is required so i'll take the the capex i would expect pretty increment like a a level of capex you guys won't notice most of that will come there's like instrumentation and tech stuff on the line um and then uh and then de-bottlenecking work as we get the sheet machines ramped up you'll you'll run into everything but i think uh the the headline will be a number that's not really meaningful uh for you guys it'll be a lot of work for the team um what's what's expect you know what's reasonable over the next three to five years um we won't get the full billion over the three to five years uh i'll tell you that i think we'll get a good chunk uh we gave you the what we've done over the last 12 months i think that's a good indication of the you know of a potential run rate we're pretty early it's pretty hard stuff you know if i had to arrange it my range would be pretty big for you but we're making progress so i think if you took that you know what we've done the last 12 months coupled with we're not going to get it all in three to five years you can kind of get a sense of where we think we'll land uh with the thing um reformulation for fiber cement I think we've got we've got we've got run room on it we've been doing it a long time so I think the way to set expectations there is I don't see like a reformulation lever that sort of resets our cost position you know dramatically but there's a lot of runway to keep contributing to that annual productivity inflation offset that kind of activity i'd see you know bigger probably step change opportunity on on decade reformulation that exists on fiber cement but there's still plenty of juice to squeeze it's going to come kind of incrementally on fiber cement and help us you know roll up to that annual productivity so phil here's what i would say the way we've set up the organization again best of both so we have

a product organization under John right so we have general managers who you know are dedicated to product they have a P&L they're working hand-in-hand with an R&D organization right so what they're constantly trying to do not only go out and sell more product but how do we make it more profitable as well so the other thing on top of that is we have a group that is solely dedicated to reformulation and what I call VI, value improvement. So it's part of the competency of John's team of product managers to not only develop more product, go out and sell more, but how to make it more profitable as well. And this is one of the things that we used to do at Hardy. So now we're doing that. We're instituting it across the whole company here. So we should continue to see when, you know, Ryan put up there, the Haas type of savings target out there is to deliver on that, you know, year in and year out.

Gotcha. uh if i could sneak one more in on the azac reformulation side that's the bigger opportunity what are the one a few things that really excite you where you can really unlock value on the azac side john so it's uh phil it's just going to be a continuation of what we've been working on before but i think we're able to accelerate our efforts now with the combined r&d organization right so you simply put uh we have more sort of