0001159152-19-000076.txt : 20190809 0001159152-19-000076.hdr.sgml : 20190809 20190809114532 ACCESSION NUMBER: 0001159152-19-000076 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 56 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190809 DATE AS OF CHANGE: 20190809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: James Hardie Industries plc CENTRAL INDEX KEY: 0001159152 STANDARD INDUSTRIAL CLASSIFICATION: CONCRETE PRODUCTS, EXCEPT BLOCK & BRICK [3272] IRS NUMBER: 000000000 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15240 FILM NUMBER: 191011996 BUSINESS ADDRESS: STREET 1: 2ND FLOOR EUROPA HOUSE STREET 2: HARCOURT CENTRE HARCOURT STREET CITY: DUBLIN STATE: L2 ZIP: 2 BUSINESS PHONE: 353 1 4116924 MAIL ADDRESS: STREET 1: 2ND FLOOR EUROPA HOUSE STREET 2: HARCOURT CENTRE HARCOURT STREET CITY: DUBLIN STATE: L2 ZIP: 2 FORMER COMPANY: FORMER CONFORMED NAME: JAMES HARDIE INDUSTRIES SE DATE OF NAME CHANGE: 20100219 FORMER COMPANY: FORMER CONFORMED NAME: JAMES HARDIE INDUSTRIES N.V. DATE OF NAME CHANGE: 20090508 FORMER COMPANY: FORMER CONFORMED NAME: HARDIE JAMES INDUSTRIES NV DATE OF NAME CHANGE: 20010914 6-K 1 q1206kintro.htm 6-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the Month of August 2019
1-15240
(Commission File Number)
JAMES HARDIE INDUSTRIES plc
(Translation of registrant’s name into English)
Europa House, Second Floor
Harcourt Centre
Harcourt Street, Dublin 2, D02, WR20, Ireland
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F..X....  Form 40-F.........
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Not Applicable
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): Not Applicable


1


TABLE OF CONTENTS
 


2


Forward-Looking Statements
This Form 6-K contains forward-looking statements. James Hardie Industries plc (the “company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities and Exchange Commission, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and other written materials and in oral statements made by the company’s officers, directors or employees to analysts, institutional investors, existing and potential lenders, representatives of the media and others. Statements that are not historical facts are forward-looking statements and such forward-looking statements are statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements include:
statements about the company’s future performance;
projections of the company’s results of operations or financial condition;
statements regarding the company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products;
expectations concerning the costs associated with the suspension or closure of operations at any of the company’s plants and future plans with respect to any such plants;
expectations concerning the costs associated with the significant capital expenditure projects at any of the company’s plants and future plans with respect to any such projects;
expectations regarding the extension or renewal of the company’s credit facilities including changes to terms, covenants or ratios;
expectations concerning dividend payments and share buy-backs;
statements concerning the company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges;
uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark;
statements regarding tax liabilities and related audits, reviews and proceedings;
statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings;
expectations about the timing and amount of contributions to AICF, a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims;
expectations concerning the adequacy of the company’s warranty provisions and estimates for future warranty-related costs;
statements regarding the company’s ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third-party recoveries; and
statements about economic conditions, such as changes in the US economic or housing market conditions or changes in the market conditions in the Asia Pacific region, the levels of new home construction and home renovations, unemployment levels, changes in consumer income, changes or stability in housing values, the availability of mortgages and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates, and builder and consumer confidence.

Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward-looking statements and all such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.
Forward-looking statements are based on the Company’s current expectations, estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the Company’s control. Such known and unknown risks, uncertainties and other

3


factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements. These factors, some of which are discussed under “Risk Factors” in Section 3 of the Form 20-F filed with the Securities and Exchange Commission on 21 May 2019 and subsequently amended on 8 August 2019, include, but are not limited to: all matters relating to or arising out of the prior manufacture of products that contained asbestos by current and former Company subsidiaries; required contributions to AICF, any shortfall in AICF and the effect of currency exchange rate movements on the amount recorded in the Company’s financial statements as an asbestos liability; the continuation or termination of the governmental loan facility to AICF; compliance with and changes in tax laws and treatments; competition and product pricing in the markets in which the Company operates; the consequences of product failures or defects; exposure to environmental, asbestos, putative consumer class action or other legal proceedings; general economic and market conditions; the supply and cost of raw materials; possible increases in competition and the potential that competitors could copy the Company’s products; reliance on a small number of customers; a customer’s inability to pay; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; currency exchange risks; dependence on customer preference and the concentration of the Company’s customer base on large format retail customers, distributors and dealers; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; possible inability to renew credit facilities on terms favorable to the Company, or at all; acquisition or sale of businesses and business segments; changes in the Company’s key management personnel; inherent limitations on internal controls; use of accounting estimates; the integration of Fermacell into our business; and all other risks identified in the Company’s reports filed with Australian, Irish and US securities regulatory agencies and exchanges (as appropriate). The Company cautions you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially from those referenced in the Company’s forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the Company’s current expectations concerning future results, events and conditions. The Company assumes no obligation to update any forward-looking statements or information except as required by law.



4


EXHIBIT INDEX
 
Exhibit No.
 
Description
 
ASX Cover 30 June 2019
 
Media Release
 
Management’s Analysis of Results
 
Management Presentation
 
Condensed Consolidated Financial Statements


5


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
 
 
 
 
James Hardie Industries plc
Date:    9 August 2019
 
By:  /s/ Natasha Mercer
 
 
 
 
Natasha Mercer
 
 
Company Secretary

6


EXHIBIT INDEX
 
Exhibit No.
 
Description
 
ASX Cover 30 June 2019
 
Media Release
 
Management’s Analysis of Results
 
Management Presentation
 
Condensed Consolidated Financial Statements


7
EX-99.1 2 ex991asxcover.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
Results for Announcement to the Market
James Hardie Industries plc
ARBN 097 829 895
Three Months Ended 30 June 2019
Key Information
Three Months Ended 30 June
 
 
FY 2020
US$M
FY 2019
US$M
Movement
Net Sales From Ordinary Activities
656.8
651.0
Up
1%
Profit From Ordinary Activities After Tax Attributable to Shareholders
86.5
90.6
Down
5%
Net Profit Attributable to Shareholders
86.5
90.6
Down
5%
Net Tangible Assets per Ordinary Share
US$1.29
US$1.09
Up
18%

Dividend Information
A FY2019 second half ordinary dividend (“FY2019 second half dividend”) of US26.0 cents per security was paid to CUFS holders on 2 August 2019.
The record date to determine entitlements to the FY2019 second half dividend was 6 June 2019 (on the basis of proper instruments of transfer received by the Company’s registrar, Computershare Investor Services Pty Ltd, Level 4, 60 Carrington Street, Sydney NSW 2000, Australia, by 5:00pm if securities are not CHESS approved, or security holding balances established by 5:00pm or such later time permitted by ASTC Operating Rules if securities are CHESS approved).
The FY2019 second half dividend was, and future dividends will be unfranked for Australian taxation purposes.
The Company was required to deduct Irish DWT (currently 20% of the gross dividend amount) from this dividend and will be required to for future dividends, unless the beneficial owner has completed and returned a non-resident declaration form (DWT Form).
The Australian currency equivalent amount of the FY2019 second half dividend paid to CUFS holders was 37.2814 Australian cents.
No dividend reinvestment plan is currently in operation for dividends previously announced and paid by the Company.

Movements in Controlled Entities during the three months Ended 30 June 2019

The following entity was dissolved: James Hardie NZ Holdings Limited (10 June 2019)

Associates and Joint Venture Entities

FELS Recycling GmbH (51%); Aplicaciones Minerales S.A. (28%)

Review

The results and information included within this report have been prepared using US GAAP and have been subject to an independent review by external auditors.
Results for the 1st Quarter Ended 30 June 2019
 
 
Contents
 
 
1.
Media Release
2.
Management's Analysis of Results
3.
Management Presentation
4.
Consolidated Financial Statements
James Hardie Industries plc is incorporated under the laws of Ireland with its corporate seat in Dublin, Ireland. The liability of members is limited. The information contained in the above documents should be read in conjunction with the James Hardie 2019 Annual Report which can be found on the company website at www.jameshardie.com.

EX-99.2 3 ex992mrq1fy20.htm EXHIBIT 99.2 Exhibit
Media Release
9 August 2019
directorretirementsan_image1.jpg
 

Exhibit 99.2
James Hardie Announces Adjusted Net Operating Profit of
US$90.2 million for Q1 Fiscal Year 2020
 

James Hardie today announced results for the quarter ended 30 June 2019:
Group Adjusted net operating profit ("NOPAT") of US$90.2 million for the quarter, an increase of 13% compared to the prior corresponding period (“pcp”);
Group Adjusted EBIT of US$124.4 million for the quarter, an increase of 16% compared to pcp;
Group net sales of US$656.8 million for the quarter, an increase of 1% compared to pcp;
North America Fiber Cement Segment volume increased 4% for the quarter, compared to pcp;
North America Fiber Cement Segment EBIT margin of 25.1% for the quarter;
Asia Pacific Fiber Cement Segment EBIT margin of 23.0% for the quarter;
Europe Building Products Segment Adjusted EBIT margin excluding integration costs of 10.7% for the quarter; and
Payment of US$108.9 million to AICF during Q2 FY20.
CEO Commentary
 

James Hardie CEO Dr Jack Truong said, “Our consolidated group results reflected very good performance in all three segments, with an increase in Adjusted EBIT and Adjusted NOPAT of 16% and 13%, respectively."

He continued, "Our North America Fiber Cement segment delivered very good volume growth in a down market while generating EBIT margin at the top end of our target range. North America housing market demand was soft across most geographies and customer segments in the first six months of calendar year 2019. However, our exteriors business grew 5% in volume in the quarter, compared to the prior corresponding period. Our commercial transformation and implementation of lean manufacturing in our North American plants continue to progress well. We remain confident these transformations will lead to continued improvement in our ability to execute and deliver sustainable results."

Dr Truong added, “Our Asia Pacific Fiber Cement segment delivered solid financial results despite a contracting Australia housing market. Our Australian and Philippines businesses led the way in gaining volume growth above their underlying market growth. Our EBIT margins were in the middle of our target range and continued to be impacted by input cost inflation."

He concluded, “Our Europe Building Products segment delivered strong revenue growth in Euros of 7% for the quarter. We remain focused on driving sales synergies across our two core product ranges: fiber gypsum and fiber cement; and also in delivering new fiber cement products developed for the European market. While starting from a low base, we have begun to deliver fiber cement penetration, with fiber cement revenue growth of 37% for the quarter. Adjusted EBIT margin excluding integration costs of 10.7% is in line with our expectations and we are on track to deliver full year EBIT margin accretion for fiscal year 2020."








Media Release: James Hardie - 1st Quarter Fiscal Year 2020
1

Media Release
9 August 2019
directorretirementsan_image1.jpg
 

Outlook
 

We expect to see modest growth in the US housing market in fiscal year 2020. The Company expects new construction starts between approximately 1.2 million and 1.3 million.

We expect our North America Fiber Cement segment EBIT margin to be at the top of our range of 20% to 25% for fiscal year 2020. This expectation is based upon the Company continuing to improve operating performance in our plants, improved net average sales price and mix, flattening of input costs and modest underlying housing growth.

In Australia, it is anticipated that our addressable underlying market will experience high single digit percent contraction in fiscal year 2020 compared to fiscal year 2019. Net sales from our Australian business are expected to continue to grow above the market. The growth will be driven by primary demand initiatives that are targeted across both residential and addressable non-residential segments.

We expect our Europe Building Product segment to achieve year on year net sales and EBIT margin growth.

Full Year Earnings Guidance
 

Management notes the range of analysts’ forecasts for net operating profit excluding asbestos for the year ending 31 March 2020 is between US$328 million and US$360 million. Management expects full year Adjusted net operating profit to be between US$325 million and US$365 million assuming, among other things, housing conditions in the United States remain consistent and in line with our assumed forecast of new construction starts, input costs remain consistent, and an average USD/AUD exchange rate that is at or near current levels for the remainder of the year. Management cautions that US housing market conditions remain somewhat uncertain and some input costs remain volatile.

The comparable Adjusted net operating profit for fiscal year 2019 was US$300.5 million. The Company is unable to forecast the comparable US GAAP financial measure due to uncertainty regarding the impact of actuarial estimates on asbestos-related assets and liabilities in future periods.

Further Information
 
Readers are referred to the Company’s Condensed Consolidated Financial Statements and Management’s Analysis of Results for the three months ended 30 June 2019 for additional information regarding the Company’s results, including information regarding income taxes, the asbestos liability and contingent liabilities.

Use of Non-GAAP Financial Information; Australian Equivalent Terminology
 

This Media Release includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (GAAP), such as Adjusted net operating profit and Adjusted EBIT. These non-GAAP financial measures should not be considered to be more meaningful than the equivalent GAAP measure. Management has included such measures to provide investors with an alternative method for assessing its operating results in a manner that is focused on the performance of its ongoing operations and excludes the impact of certain legacy items, such as asbestos adjustments. Additionally, management uses such non-GAAP financial measures for the same purposes. However, these non-GAAP financial measures are not prepared in accordance with US GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due

Media Release: James Hardie - 1st Quarter Fiscal Year 2020
2

Media Release
9 August 2019
directorretirementsan_image1.jpg
 

to potential differences in the exact method of calculation. For additional information regarding the non-GAAP financial measures presented in this Media Release, including a reconciliation of each non-GAAP financial measure to the equivalent US GAAP measure, see the section titled “Non-US GAAP Financial Measures” included in the Company’s Management’s Analysis of Results for the first quarter ended 30 June 2019.

In addition, this Media Release includes financial measures and descriptions that are considered to not be in accordance with US GAAP, but which are consistent with financial measures reported by Australian companies, such as operating profit, EBIT and EBIT margin. Since the Company prepares its Condensed Consolidated Financial Statements in accordance with US GAAP, the Company provides investors with a table and definitions presenting cross-references between each US GAAP financial measure used in the Company’s Condensed Consolidated Financial Statements to the equivalent non-US GAAP financial measure used in this Media Release. See the sections titled “Non-US GAAP Financial Measures” included in the Company’s Management’s Analysis of Results for the first quarter ended 30 June 2019.
Forward-Looking Statements
 
This Media Release contains forward-looking statements and information that are necessarily subject to risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of James Hardie to be materially different from those expressed or implied in this release, including, among others, the risks and uncertainties set forth in Section 3 “Risk Factors” in James Hardie’s Annual Report on Form 20-F for the year ended 31 March 2019; changes in general economic, political, governmental and business conditions globally and in the countries in which James Hardie does business; changes in interest rates; changes in inflation rates; changes in exchange rates; the level of construction generally; changes in cement demand and prices; changes in raw material and energy prices; changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. James Hardie assumes no obligation to update or correct the information contained in this Media Release except as required by law.
END
Media/Analyst Enquiries:
Jason Miele
Vice President, Investor and Media Relations
 
Telephone:
  
+61 2 8845 3352
Email:
  
media@jameshardie.com.au

Media Release: James Hardie - 1st Quarter Fiscal Year 2020
3
EX-99.3 4 ex993maq1fy20.htm EXHIBIT 99.3 Exhibit
Fiscal 2020
First Quarter Ended 30 June 2019
directorretirementsan_image1.jpg
 


Exhibit 99.3
Management’s Analysis of Results
 
This Management’s Analysis of Results forms part of a package of information about James Hardie Industries plc’s results. It should be read in conjunction with the other parts of this package, including the Media Release, the Management Presentation and the condensed consolidated financial statements. Except as otherwise indicated in this Management’s Analysis of Results, James Hardie Industries plc is referred to as “JHI plc.” JHI plc, together with its direct and indirect wholly-owned subsidiaries, are collectively referred to as “James Hardie,” the “Company,” “we,” “our,” or “us.” Definitions for certain capitalized terms used in this Management’s Analysis of Results can be found in the section titled “Non-GAAP Financial Measures.”
This Management’s Analysis of Results includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (“US GAAP”). These non-GAAP financial measures should not be considered to be more meaningful than the equivalent US GAAP measures. Management has included such measures to provide investors with an alternative method for assessing its financial condition and operating results in a manner that is focused on the performance of its ongoing operations. These measures exclude the impact of certain legacy items, such as asbestos adjustments, or significant non-recurring items, such as debt restructuring and acquisition costs, asset impairments, as well as adjustments to tax expense. In addition, management provides an adjusted effective tax rate, which excludes the tax impact of the pre-tax special items (items listed above) and tax special items. Management believes that this non-GAAP tax measure provides an ongoing effective rate which investors may find useful for historical comparisons and for forecasting and is an alternative method of assessing the economic impact of taxes on the Company, as it more closely approximates payments to taxing authorities. Management uses such non-GAAP financial measures for the same purposes. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with US GAAP. These non-GAAP financial measures are not prepared in accordance with US GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. For additional information regarding the non-GAAP financial measures presented in this Management’s Analysis of Results, including a reconciliation of each non-GAAP financial measure to the equivalent US GAAP measure, see the section titled “Non-US GAAP Financial Measures.” In addition, this Management’s Analysis of Results includes financial measures and descriptions that are considered to not be in accordance with US GAAP, but which are consistent with financial measures reported by Australian companies. Since James Hardie prepares its condensed consolidated financial statements in accordance with US GAAP, the Company provides investors with a table and definitions presenting cross-references between each US GAAP financial measure used in the Company’s condensed consolidated financial statements to the equivalent non-US GAAP financial measure used in this Management’s Analysis of Results. See the section titled “Non-US GAAP Financial Measures.”
These documents, along with an audio webcast of the Management Presentation on 9 August 2019, are available from the Investor Relations area of our website at http://www.ir.jameshardie.com.au

Media/Analyst Enquiries:
Jason Miele
Vice President, Investor and Media Relations
 
 
 
 
Telephone:

 
+61 2 8845 3352
Email:     

 
media@jameshardie.com.au

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
1



GROUP RESULTS
directorretirementsan_image1.jpg
 


James Hardie Industries plc
Results for the 1st Quarter Ended 30 June
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change % 
Net sales
 
$
656.8

 
$
651.0

 
1

Cost of goods sold
 
(423.7
)
 
(429.9
)
 
1

Gross profit
 
233.1

 
221.1

 
5

 
 
 
 
 
 
 
Selling, general and administrative expenses
 
(101.5
)
 
(104.9
)
 
3

Research and development expenses
 
(7.6
)
 
(9.4
)
 
19

Asbestos adjustments
 
8.5

 
25.1

 
(66
)
EBIT
 
132.5

 
131.9

 

 
 
 
 
 
 
 
Net interest expense
 
(13.7
)
 
(10.6
)
 
(29
)
Other (expense) income
 
(0.2
)
 
0.2

 


Operating profit before income taxes
 
118.6

 
121.5

 
(2
)
Income tax expense
 
(32.1
)
 
(30.9
)
 
(4
)
Net operating profit
 
$
86.5

 
$
90.6

 
(5
)
 
 
 
 
 
 


Earnings per share - basic (US cents)
 
20

 
21

 
 
Earnings per share - diluted (US cents)
 
20

 
20

 
 
 
 
 
 
 
 
 
Volume (mmsf)
 
957.2

 
938.6

 
2


Net sales for the quarter increased 1% from the prior corresponding period to US$656.8 million, driven by higher net sales in the North America Fiber Cement and Europe Building Products segments, partially offset by lower net sales in the Asia Pacific Fiber Cement segment.

Gross profit of US$233.1 million for the quarter increased 5% when compared to the prior corresponding period. Gross profit margin of 35.5% for the quarter increased 1.5 percentage points when compared to the prior corresponding period.

Selling, general and administrative (“SG&A”) expenses for the quarter decreased 3% when compared to the prior corresponding period. The decrease was primarily driven by lower Fermacell transaction costs, partially offset by higher labor related costs.

Asbestos adjustments for the quarter primarily reflects the non-cash foreign exchange re-measurement impact on asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate.

 
Interest expense for the quarter increased primarily due to a higher interest rate on our Euro denominated debt.

Other (expense) income for the quarter reflects the gains and losses on interest rate swaps.

Income tax expense for the quarter increased due to a change in the geographic mix of earnings, partially offset by a change in tax adjustments.

Net operating profit decreased for the quarter, primarily driven by the movement in asbestos adjustments, partially offset by the favorable underlying performance of the North America Fiber Cement and Europe Building Products segments.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
2


OPERATING RESULTS - SEGMENT
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North America Fiber Cement Segment

Operating results for the North America Fiber Cement segment were as follows:

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change    
Volume (mmsf)
 
612.7

 
591.0

 
4
%
Average net sales price per unit (per msf)
 
US$731
 
US$725
 
1
%
 
 
 
 
 
 
 
Fiber cement net sales
 
452.3

 
433.8

 
4
%
Gross profit
 
 
 
 
 
5
%
Gross margin (%)
 
 
 
 
 
0.2 pts
EBIT
 
113.5

 
107.2

 
6
%
EBIT margin (%)
 
25.1

 
24.7

 
0.4 pts

Net sales for the quarter were favorably impacted by higher sales volumes and a higher average net sales price compared to the prior corresponding period. The increase in volume includes growth in exteriors of 5% for the quarter compared to the prior corresponding period, reflecting commercial momentum and solid growth above the market index. This increase in exteriors volume was partially offset by a decrease in interiors volume of 3% for the quarter. The increase in average net sales price of 1% for the quarter primarily reflects the annual change in our strategic pricing effective April 2019, partially offset by tactical pricing.

We note that there are a number of data sources that measure US housing market growth. At the time of filing our results for the period ended 30 June 2019, only US Census Bureau data was available. According to the US Census Bureau, single family housing starts for the quarter were 241,300, or 6% below the prior corresponding period. We note that the US Census Bureau's data can be different from other indices we use to measure US housing market growth, namely the McGraw-Hill Construction Residential Starts Data (also known as Dodge), the National Association of Home Builders and Fannie Mae. 

The change in gross margin for the quarter can be attributed to the following components:

For the Three Months Ended 30 June 2019:
 
Higher average net sales price
0.4
 pts
Higher production and other costs
(0.2 pts)

Total percentage point change in gross margin
0.2
 pts

Gross margin for the quarter increased 0.2 percentage points compared to the prior corresponding period. This increase was primarily due to a higher average net sales price, partially offset by higher production costs. Higher production costs were driven by higher input costs, primarily pulp, partially offset by improved plant performance.

As a percentage of sales, SG&A expenses decreased 0.2 percentage points for the quarter, when compared to the prior corresponding period. SG&A expenses for the quarter were higher compared to the prior corresponding period, primarily driven by higher labor related costs, partially offset by lower discretionary spend.

EBIT for the quarter increased 6% compared to the prior corresponding period, primarily driven by a 5% increase in gross profit. EBIT margin for the quarter increased 0.4 percentage points to 25.1% when compared to the prior corresponding period, driven by the increase in gross margin and the decrease in SG&A expenses as a percentage of sales.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
3


OPERATING RESULTS - SEGMENT
directorretirementsan_image1.jpg
 

Asia Pacific Fiber Cement Segment

The Asia Pacific Fiber Cement segment is comprised of the following businesses: (i) Australia Fiber Cement, (ii) New Zealand Fiber Cement and (iii) Philippines Fiber Cement.

Operating results for the Asia Pacific Fiber Cement segment in US dollars were as follows:

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change   
Volume (mmsf)
 
134.4

 
138.0

 
(3
%)
Average net sales price per unit (per msf)
 
US$712
 
US$753
 
(5
%)
 
 
 
 
 
 
 
Fiber cement net sales
 
108.0

 
117.1

 
(8
%)
Gross profit
 
 
 
 
 
(12
%)
Gross margin (%)
 
 
 
 
 
(1.5 pts)
EBIT
 
24.8

 
28.3

 
(12
%)
EBIT margin (%)
 
23.0

 
24.2

 
(1.2 pts)

The Asia Pacific Fiber Cement segment results in US dollars were unfavorably impacted by average foreign exchange rate movements for the quarter as detailed in the table below:

 
Q1 FY20
 
Results in AUD
Results in USD
Impact of FX
Average net sales price per unit (per msf)
+2%
-5%
-7%
Fiber cement net sales
FLAT
-8%
-8%
Gross profit
-5%
-12%
-7%
EBIT
-6%
-12%
-6%

Operating results for the Asia Pacific Fiber Cement segment in Australian dollars were as follows:

A$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change   
Volume (mmsf)
 
134.4

 
138.0

 
(3
%)
Average net sales price per unit (per msf)
 
A$1,018
 
A$995
 
2
%
 
 
 
 
 
 
 
Fiber cement net sales
 
154.4

 
154.7

 
%
Gross profit
 
 
 
 
 
(5
%)
Gross margin (%)
 
 
 
 
 
(1.6 pts)

EBIT
 
35.4

 
37.5

 
(6
%)
EBIT margin (%)
 
23.0

 
24.2

 
(1.2 pts)


Volume for the quarter decreased 3% compared to the prior corresponding period, primarily driven by a significant softening of the Australian market, partially offset by strong domestic sales volumes in the Philippines.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - SEGMENT
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Net sales in Australian dollars for the quarter was flat compared to the prior corresponding period, primarily driven by the favorable impact of our strategic price increase in Australia and higher volume in the Philippines, offset by lower volume in Australia.

In Australian dollars, the change in gross margin for the quarter can be attributed to the following components:
 
 
For the Three Months Ended 30 June 2019:
 
Higher average net sales price
1.4
 pts
Higher production costs
(3.0 pts)

Total percentage point change in gross margin
(1.6 pts)


Gross profit in Australian dollars decreased 5% for the quarter compared to the prior corresponding period. The decrease for the quarter was driven by higher input costs, primarily pulp, and unfavorable plant performance in New Zealand.

As a percentage of sales, SG&A expenses in Australian dollars decreased 0.2 percentage points for the quarter when compared to the prior corresponding period, primarily driven by prudent financial management in light of the housing market conditions. EBIT in Australian dollars decreased 6% for the quarter when compared to the prior corresponding period to A$35.4 million.

Country Analysis

Australia Fiber Cement

Net sales in local currency for the quarter decreased 3% from the prior corresponding period, primarily due to a decrease in volume, partially offset by the favorable impact of our strategic price increase. The decrease in volume was attributable to a continued softening of the housing market.

EBIT in local currency for the quarter decreased 5% when compared to the prior corresponding period primarily driven by lower net sales.

According to Australian Bureau of Statistics data, approvals for detached houses, a key driver of Australian business' sales volume, were 26,029 for the quarter, a decrease of 17% compared to the prior corresponding period. The other key driver of our sales volume, the alterations and additions market, was down by 1% for the quarter ended 30 June 2019 when compared to the prior corresponding period.

New Zealand Fiber Cement

Net sales in local currency for the quarter decreased 1% from the prior corresponding period, primarily driven by a decrease in volume. EBIT in local currency decreased for the quarter compared to the prior corresponding period, primarily due to unfavorable plant performance and higher input costs.

Philippines Fiber Cement

Volume for the quarter increased 11% when compared to the prior corresponding period, primarily as a result of market penetration. EBIT in local currency for the quarter decreased compared to the prior corresponding period, driven by higher input costs, partially offset by higher sales volumes.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - SEGMENT
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Europe Building Products Segment

The Europe Building Products segment is comprised of: (i) Europe Fiber Cement and (ii) Europe Fiber Gypsum. Operating results for the Europe Building Products segment in US dollars were as follows:

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change   
Volume (mmsf)
 
210.1

 
209.6

 
%
Average net sales price per unit (per msf)
 
US$354
 
US$361
 
(2
%)
 
 
 
 
 
 
 
Fiber cement net sales
 
12.5

 
9.2

 
36
%
Fiber gypsum net sales1
 
83.4

 
86.2

 
(3
%)
Net sales
 
95.9

 
95.4

 
1
%
Gross profit
 
 
 
 
 
41
%
Gross margin (%)
 
 
 
 
 
9.3 pts
EBIT2
 
7.9

 
(4.6
)
 

EBIT margin (%)2
 
8.2

 
(4.8
)
 
13.0 pts
 
 
 
 
 
 
 
1 Also includes cement bonded board net sales

2 Includes costs associated with the Fermacell acquisition. See further details below

Operating results for the Europe Building Products segment in Euros were as follows:

 Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change   
Volume (mmsf)
 
210.1

 
209.6

 
%
Average net sales price per unit (per msf)
 
€315
 
€303
 
4
%
 
 
 
 
 
 
 
Fiber cement net sales
 
11.1
 
8.1

 
37
%
Fiber gypsum net sales1
 
74.3
 
71.9
 
3
%
Net sales
 
85.4
 
80.0
 
7
%
Gross profit
 
 
 
 
 
51
%
Gross margin (%)
 
 
 
 
 
9.6
 pts
EBIT2
 
7.1

 
(3.8
)
 

EBIT margin (%)2
 
8.3

 
(4.8
)
 
13.1
 pts
 
 
 
 
 
 
 
1 Also includes cement bonded board net sales

2 Includes costs associated with the Fermacell acquisition. See further details below

Net sales in Euros for the quarter increased 7% compared to the prior corresponding period, driven by a 37% increase in fiber cement net sales. Average net sales price in Euros for the quarter increased 4% compared to the prior corresponding period, primarily due to product mix.

Gross profit in Euros increased 51% for the quarter compared to the prior corresponding period. The increase was primarily driven by a one time inventory fair value adjustment of €6.2 million (US$7.3 million) incurred following the acquisition of Fermacell in the prior year.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - SEGMENT
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EBIT for the quarter increased €10.9 million, compared to the prior corresponding period, primarily due to lower transaction and integration related costs associated with the Fermacell acquisition. As part of the acquisition in the prior year, we incurred a one time inventory fair value adjustment as discussed above, as well as transaction costs of €5.9 million (US$7.2 million).

Below, we have included Non-US GAAP measures, Europe Building Products segment Adjusted EBIT and Adjusted EBIT margin excluding costs associated with the acquisition. Note that the below reconciling items have not been excluded from Adjusted EBIT and Adjusted net operating profit as presented on pages 10 and 12, respectively.

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change
Europe Building Products segment EBIT
 
7.9

 
(4.6
)
 


 
 
 
 
 
 
 
Inventory fair value adjustment 1
 

 
7.3

 


Transaction costs2
 

 
7.2

 


Integration costs3
 
2.4

 
1.5

 
60
%
 
 

 
 
 
 
Europe Building Products segment Adjusted EBIT excluding costs associated with the acquisition
 
10.3

 
11.4

 
(10
%)
 
 
 
 
 
 
 
Europe Building Products segment Adjusted EBIT margin excluding costs associated with the acquisition
 
10.7
%
 
11.9
%
 
(1.2 pts)
 
 
 
 
 
 
 
1 Under US GAAP, we were required to value the inventory acquired at fair market value. The revaluation resulted in a preliminary total inventory fair value adjustment of US$7.3 million. As this inventory was sold during the first quarter of FY19, the entire adjustment was recognized into cost of goods sold during that quarter

2 Transaction costs include certain non-recurring fees incurred in conjunction with the acquisition of Fermacell

3 Integration costs relate to professional, legal and other fees incurred in conjunction with the integration of Fermacell

Adjusted EBIT excluding costs associated with the acquisition decreased 10%, or US$1.1 million, from the prior corresponding period, primarily due to the increase in SG&A expenses from a higher headcount.

Other Businesses Segment
 
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change
Net sales
 
0.6

 
4.7

 
(87
%)
EBIT
 
0.4

 
(1.5
)
 



The Other Businesses segment was comprised of our fiberglass windows business, which included a fiberglass windows assembly facility as well as a fiberglass pultrusion business. In fiscal year 2019, we made the decision to shut down the fiberglass windows business, closed the windows assembly business and recorded product line discontinuation costs associated with the shut down of the business. During the current quarter we ceased operations at and sold our fiberglass pultrusion portion of the business, which resulted in a gain on sale of US$0.5 million. Prior to the sale of the fiberglass pultrusion portion of the business, we had US$0.6 million of net sales which generated an EBIT loss of US$0.1 million.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - SEGMENT
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Research and Development Segment
We record R&D expenses depending on whether they are core R&D projects that are designed to benefit all business units, which are recorded in our R&D segment, or commercialization projects for the benefit of a particular business unit, which are recorded in the individual business unit’s segment results. The table below details the expenses of our R&D segment:

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change %
Segment R&D expenses
 
$
(5.5
)
 
$
(6.9
)
 
20

Segment R&D SG&A expenses
 
(0.7
)
 
(0.5
)
 
(40
)
Total R&D EBIT
 
$
(6.2
)
 
$
(7.4
)
 
16

 
 
 
 
 
 
 

The change in segment R&D expenses for the quarter was driven by a change in the prioritization of R&D activities and projects, as well as normal variation among our research and development projects. The expense will fluctuate period to period depending on the nature and number of core R&D projects being worked on and the AUD/USD exchange rates during the period.

Other R&D expenses associated with commercialization projects in business units are recorded in the results of the respective business unit segment. Other R&D expenses associated with commercialization projects for the quarter were US$2.1 million, compared to US$2.5 million for the prior corresponding period.

General Corporate

Results for General Corporate were as follows:

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change % 
General Corporate SG&A expenses
 
$
(15.8
)
 
$
(13.3
)
 
(19
)
New Zealand weathertightness
 
(0.2
)
 
(1.6
)
 
88

Asbestos:
 
 
 
 
 
 
Asbestos adjustments
 
8.5

 
25.1

 
(66
)
AICF SG&A expenses1
 
(0.4
)
 
(0.3
)
 
(33
)
General Corporate EBIT
 
$
(7.9
)
 
$
9.9

 


 
 
 
 
 
 
 
1 Relates to non-claims related operating costs incurred by AICF, which we consolidate into our financial results due to our pecuniary and contractual interests in AICF

For the quarter, General Corporate SG&A expenses increased US$2.5 million when compared to the prior corresponding period. This increase was driven by an unfavorable movement in foreign exchange gains and losses as well as higher stock compensation expenses. The decrease in New Zealand weathertightness expense is primarily due to the settlement of a claim in the prior year of US$1.6 million. 

Asbestos adjustments for both periods primarily reflect the non-cash foreign exchange re-measurement impact on asbestos related balance sheet items, driven by the change in the AUD/USD spot exchange rate from the beginning balance sheet date to the ending balance sheet date, for each respective period.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - SEGMENT
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The AUD/USD spot exchange rates are shown in the table below:

FY20
FY19
31 March 2019
 
0.7096

31 March 2018
 
0.7681

30 June 2019
 
0.7010

30 June 2018
 
0.7387

Change ($)
 
(0.0086
)
Change ($)
 
(0.0294
)
Change (%)
 
(1
)
Change (%)
 
(4
)
Readers are referred to Note 9 of our 30 June 2019 condensed consolidated financial statements for further information on asbestos adjustments.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - OTHER
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EBIT
The table below summarizes EBIT results as discussed above:
US$ Millions
Three Months Ended 30 June
    
 
FY20
 
FY19
 
Change %  
North America Fiber Cement
 
$
113.5

 
$
107.2

 
6

Asia Pacific Fiber Cement
 
24.8

 
28.3

 
(12
)
Europe Building Products
 
7.9

 
(4.6
)
 


Other Businesses
 
0.4

 
(1.5
)
 


Research and Development
 
(6.2
)
 
(7.4
)
 
16

General Corporate1
 
(16.0
)
 
(14.9
)
 
(7
)
Adjusted EBIT
 
124.4

 
107.1

 
16

Asbestos:
 
 
 
 
 
 
Asbestos adjustments
 
8.5

 
25.1

 
(66
)
AICF SG&A expenses
 
(0.4
)
 
(0.3
)
 
(33
)
EBIT
 
$
132.5

 
$
131.9

 

 
 
 
 
 
 
 
1 Excludes Asbestos-related expenses and adjustments

Net Interest Expense

US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change %  
Gross interest expense
 
$
(16.5
)
 
$
(13.2
)
 
(25
)
Capitalized interest
 
2.0

 
1.8

 
11

Interest income
 
0.6

 
0.5

 
20

Net AICF interest income
 
0.2

 
0.3

 
(33
)
Net interest expense
 
$
(13.7
)
 
$
(10.6
)
 
(29
)

Gross interest expense for the quarter increased US$3.3 million when compared to the prior corresponding period, primarily due to the higher interest rate on our long-term Euro denominated debt compared to the previously outstanding 364-day term loan facility used to initially finance the Fermacell acquisition.

Other Income

Other income decreased from a US$0.2 million gain in the prior corresponding period to a US$0.2 million loss during the quarter. The movement in other income is primarily driven by the valuation of our interest rate swaps.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - OTHER
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Income Tax

 
Three Months Ended 30 June
    
 
FY20
 
FY19
Income tax expense (US$ Millions)
 
(32.1
)
 
(30.9
)
Effective tax rate (%)
 
27.1

 
25.4

 
 
 
 
 
Adjusted income tax expense1 (US$ Millions)
 
(20.1
)
 
(16.5
)
Adjusted effective tax rate1 (%)
 
18.2

 
17.1

 
 
 
 
 
1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments

Total income tax expense for the quarter increased US$1.2 million when compared to the prior corresponding period, primarily due to a change in the geographic mix of earnings, partially offset by a change in tax adjustments.

Adjusted income tax expense for the quarter increased US$3.6 million compared to the prior corresponding period, driven by a change in the geographic mix of earnings, including the accounting treatment related to the amortization benefit of intangible assets.

Readers are referred to Note 12 of our 30 June 2019 condensed consolidated financial statements for further information related to income tax.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
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OPERATING RESULTS - OTHER
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Net Operating Profit
 
US$ Millions
Three Months Ended 30 June
   
 
FY20
 
FY19
 
Change %
EBIT
 
$
132.5

 
$
131.9

 

 
 
 
 
 
 
 
Net interest expense
 
(13.7
)
 
(10.6
)
 
(29
)
Other (expense) income
 
(0.2
)
 
0.2

 


Income tax expense
 
(32.1
)
 
(30.9
)
 
(4
)
Net operating profit
 
86.5

 
90.6

 
(5
)
 
 
 
 
 
 
 
Excluding:
 
 
 
 
 
 
Asbestos:
 
 
 
 
 
 
Asbestos adjustments
 
(8.5
)
 
(25.1
)
 
66

AICF SG&A expenses
 
0.4

 
0.3

 
33

AICF interest income, net
 
(0.2
)
 
(0.3
)
 
33

Tax adjustments1
 
12.0

 
14.4

 
(17
)
Adjusted net operating profit
 
90.2

 
79.9

 
13

 
 
 
 
 
 
 
Adjusted diluted earnings per share (US cents)
 
20
 
18

 
 

 
 
 
 
 
 
 
1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments

Adjusted net operating profit of US$90.2 million for the quarter increased US$10.3 million, or 13%, compared to the prior corresponding period, primarily due to the underlying performance of the operating business units, as reflected in the US$17.3 million increase in Adjusted EBIT, partially offset by higher Adjusted income tax expense of US$3.6 million and higher net interest expense of US$3.1 million. EBIT in the Europe Building Products and North America Fiber Cement segments increased US$12.5 million and US$6.3 million, respectively. This increase was partially offset by the US$3.5 million decrease in Asia Pacific Fiber Cement segment EBIT.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
12


OTHER INFORMATION
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Cash Flow
Operating Activities
Cash provided by operating activities increased US$32.7 million to US$140.2 million. The increase in cash provided by operating activities was driven by net cash inflows in working capital of US$19.3 million and an increase in net income adjusted for non-cash items of US$17.4 million, partially offset by changes in other operating assets and liabilities of US$4.0 million. The net cash inflow from working capital was primarily due to the timing of payments in accounts payable and the timing of collections in accounts receivable. The primary driver of the change in other operating assets and liabilities was due to normal variations in the course of our business.
Investing Activities
Cash used in investing activities decreased US$546.6 million to US$43.3 million. The decrease in cash used in investing activities was primarily due to the US$558.7 million acquisition of Fermacell in the prior year, current year proceeds from the sale of assets in our Other Businesses segment of US$4.5 million, and a decrease in cash used to purchase property, plant and equipment of US$4.5 million. This decrease was partially offset by lower net proceeds from AICF's short-term investments of US$20.9 million.
Financing Activities
Cash used in financing activities during the quarter was US$80.1 million, compared to cash provided by financing activities of US$392.4 million in the prior corresponding period. The US$472.5 million change was driven by proceeds from our 364-day term loan facility of US$492.4 million in the prior year, compared to nil in the current year, partially offset by higher net proceeds from our credit facilities of US$20.0 million in the current year.
Capacity Expansion

We continually evaluate the capacity required to service the housing markets in which we operate to ensure we meet demand and achieve our market penetration objectives. During the current quarter:

In North America we:
Continued the start-up of our Tacoma greenfield expansion project, which is expected to be completed in the first half of fiscal year 2020;
Continued the construction of a greenfield expansion project in Prattville, Alabama, which is expected to be commissioned in the first half of fiscal year 2021 at an estimated total cost of US$240.0 million; and
Continued the planning and construction of an expansion project within our ColorPlus® product line, including projects at our Peru and Pulaski facilities, and a greenfield project in Massachusetts. We also began the start-up of the Peru portion of this project.
In Asia Pacific we:
Continued the planning and design of a brownfield expansion project at our existing Carole Park facility in Australia with an estimated total cost of A$28.5 million. The brownfield expansion project is expected to be commissioned by the first quarter of fiscal year 2021.



Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
13


OTHER INFORMATION
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Liquidity and Capital Allocation

Our cash position increased from US$78.7 million at 31 March 2019 to US$96.1 million at 30 June 2019.

At 30 June 2019, we held two forms of debt: an unsecured revolving credit facility and senior unsecured notes. The effective weighted average interest rate on our total debt was 4.4% at 30 June 2019 and 31 March 2019. The weighted average term of all debt, including undrawn facilities, was 6.1 years and 6.3 years at 30 June 2019 and 31 March 2019, respectively.

At 30 June 2019, a total of US$70.0 million was drawn from our US$500.0 million unsecured revolving facility, compared to US$150.0 million at 31 March 2019. The unsecured revolving credit facility's expiration date is December 2022 and the size of the facility may be increased by up to US$250.0 million.

Based on our existing cash balances, together with anticipated operating cash flows arising during the year and unutilized committed credit facilities, we anticipate that we will have sufficient funds to meet our planned working capital and other expected cash requirements for the next twelve months.

We have historically met our working capital needs and capital expenditure requirements from a combination of cash flows from operations and credit facilities. Seasonal fluctuations in working capital generally have not had a significant impact on our short or long term liquidity.

Capital Management and Dividends
The following table summarizes the dividends declared or paid in respect of fiscal years 2020, 2019 and 2018:
US$ Millions
 
US Cents/ 
Security 
 
Total US$ 
(Millions)
 
Announcement 
Date 
 
Record Date 
 
Payment Date 
FY 2019 second half dividend1
 
0.26
 
115.0
 
21 May 2019
 
6 June 2019
 
2 August 2019
FY 2019 first half dividend
 
0.10
 
43.6
 
8 November 2018
 
12 December 2018
 
22 February 2019
FY 2018 second half dividend
 
0.30
 
128.5
 
22 May 2018
 
7 June 2018
 
3 August 2018
FY 2018 first half dividend
 
0.10
 
46.2
 
9 November 2017
 
13 December 2017
 
23 February 2018
FY 2017 second half dividend
 
0.28
 
131.3
 
18 May 2017  
 
8 June 2017  
 
4 August 2017  
 
 
 
 
 
 
 
 
 
 
 
1 The FY2019 second half dividend total amount of US$115.0 million represents the value of the dividend declared. Any difference between the amount declared and the amounts payable per the Company's condensed consolidated balance sheet is due to unrealized foreign exchange gain or loss associated with the change in the dividend liability between the record date and the balance sheet date

We periodically review our capital structure and capital allocation objectives and expect the following prioritization to remain:
invest in R&D and capacity expansion to support organic growth;
provide ordinary dividend payments within the payout ratio of 50-70% of net operating profit, excluding asbestos;
maintain flexibility to manage through market cycles; and
consider flexibility for accretive and strategic inorganic growth and/or other shareholder returns when appropriate.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
14


OTHER INFORMATION
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Other Asbestos Information
Claims Data
 
Three Months Ended 30 June
 
 
FY20
 
FY19
 
Change % 
Claims received
 
157

 
125

 
(26
)
Actuarial estimate for the period
 
141

 
144

 
2

Difference in claims received to actuarial estimate
 
(16
)
 
19

 


 
 
 
 
 
 
 
Average claim settlement1 (A$)
 
267,000

 
276,000

 
3

Actuarial estimate for the period2
 
306,000

 
290,000

 
(6
)
Difference in claims paid to actuarial estimate
 
39,000

 
14,000

 


 
 
 
 
 
 
 
1 Average claim settlement is derived as the total amount paid divided by the number of non-nil claim settlements
2 This actuarial estimate is a function of the assumed experience by disease type and the relative mix of settlements assumed by disease type. Any variances in the assumed mix of settlements by disease type will have an impact on the average claim settlement experience

For the period ended 30 June 2019, we noted the following related to asbestos-related claims:

Gross cash outflow in the quarter was 7% below actuarial expectations;
Claims received during the quarter were 11% above actuarial estimates and 26% higher than the prior corresponding period;
Mesothelioma claims reported for the quarter were 22% higher than actuarial expectations and 37% higher than the prior corresponding period;
The average claim settlement for the quarter was 13% below actuarial expectations; and
Average claim settlement sizes were lower for most disease types, including mesothelioma claims for all age groups, compared to actuarial expectations for the quarter.

AICF Funding
We will fund US$108.9 million to AICF during the second quarter of fiscal year 2020, as provided under the AFFA.
From the time AICF was established in February 2007 through the date of this Report, we have contributed approximately A$1,338.7 million to the fund.

Readers are referred to Note 9 of our 30 June 2019 condensed consolidated financial statements for further information on asbestos.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
15



NON-US GAAP FINANCIAL MEASURES
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Financial Measures - US GAAP equivalents

This document contains financial statement line item descriptions that are considered to be non-US GAAP, but are consistent with those used by Australian companies. Because we prepare our condensed consolidated financial statements under US GAAP, the following table cross-references each non-US GAAP line item description, as used in Management’s Analysis of Results and Media Release, to the equivalent US GAAP financial statement line item description used in our condensed consolidated financial statements:

Management’s Analysis of Results and Media Release
  
Consolidated Statements of Operations and Other Comprehensive Income (Loss) (US GAAP)
 
 
Net sales
  
Net sales
Cost of goods sold
  
Cost of goods sold
Gross profit
  
Gross profit
 
 
Selling, general and administrative expenses
  
Selling, general and administrative expenses
Research and development expenses
  
Research and development expenses
Asbestos adjustments
  
Asbestos adjustments
EBIT*
  
Operating income (loss)
 
 
Net interest income (expense)*
  
Sum of interest expense and interest income
Other income (expense)
  
Other income (expense)
Operating profit (loss) before income taxes*
  
Income (loss) before income taxes
 
 
Income tax (expense) benefit
  
Income tax (expense) benefit
 
 
Net operating profit (loss)*
  
Net income (loss)
 
*- Represents non-US GAAP descriptions used by Australian companies.

EBIT – Earnings before interest and tax.

EBIT margin – EBIT margin is defined as EBIT as a percentage of net sales.

Sales Volume

mmsf – million square feet, where a square foot is defined as a standard square foot of 5/16” thickness.

msf – thousand square feet, where a square foot is defined as a standard square foot of 5/16” thickness.






Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
16



NON-US GAAP FINANCIAL TERMS
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This Management’s Analysis of Results includes certain financial information to supplement the Company’s condensed consolidated financial statements which are prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). These financial measures are designed to provide investors with an alternative method for assessing our performance from on-going operations, capital efficiency and profit generation. Management uses these financial measure for the same purposes. These financial measures include:
 
Adjusted EBIT;
Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition;
Adjusted EBIT margin;
Europe Building Products Segment Adjusted EBIT margin excluding costs associated with the acquisition;
Adjusted net operating profit;
Adjusted diluted earnings per share;
Adjusted operating profit before income taxes;
Adjusted income tax expense;
Adjusted effective tax rate;
Adjusted EBITDA;
Adjusted EBITDA excluding Asbestos; and
Adjusted selling, general and administrative expenses (“Adjusted SG&A”).

These financial measures are or may be non-US GAAP financial measures as defined in the rules of the U.S. Securities and Exchange Commission and may exclude or include amounts that are included or excluded, as applicable, in the calculation of the most directly comparable financial measures calculated in accordance with US GAAP. These financial measures are not meant to be considered in isolation or as a substitute for comparable US GAAP financial measures and should be read only in conjunction with the Company’s condensed consolidated financial statements prepared in accordance with US GAAP. In evaluating these financial measures, investors should note that other companies reporting or describing similarly titled financial measures may calculate them differently and investors should exercise caution in comparing the Company’s financial measures to similar titled measures by other companies.

Non-financial Terms
AFFA Amended and Restated Final Funding Agreement
AICF Asbestos Injuries Compensation Fund Ltd
Legacy New Zealand weathertightness claims ("New Zealand weathertightness") Expenses arising from defending and resolving claims in New Zealand that allege poor building design, inadequate certification of plans, inadequate construction review and compliance certification and deficient work by sub-contractors
New South Wales loan facility ("NSW Loan") AICF has access to a secured loan facility made available by the New South Wales Government, which can be used by AICF to fund the payment of asbestos claims and certain operating and legal costs

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
17



NON-US GAAP FINANCIAL MEASURES
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Financial Measures - US GAAP equivalents

Adjusted EBIT
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
EBIT
 
$
132.5

 
$
131.9

Asbestos:
 
 
 
 
Asbestos adjustments
 
(8.5
)
 
(25.1
)
AICF SG&A expenses
 
0.4

 
0.3

Adjusted EBIT
 
$
124.4

 
$
107.1

Net sales
 
656.8

 
651.0

Adjusted EBIT margin
 
18.9
%
 
16.5
%

Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
Europe Building Products Segment EBIT
 
$
7.9

 
$
(4.6
)
 
 
 
 
 
Inventory fair value adjustment
 

 
7.3

Transaction costs
 

 
7.2

Integration costs
 
2.4

 
1.5

Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition

 
$
10.3

 
$
11.4

Europe Building Products segment net sales
 
95.9

 
95.4

Europe Building Products Segment Adjusted EBIT margin excluding costs associated with the acquisition

 
10.7
%
 
11.9
%

Adjusted net operating profit
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
Net operating profit
 
$
86.5

 
$
90.6

Asbestos:
 
 
 
 
Asbestos adjustments
 
(8.5
)
 
(25.1
)
AICF SG&A expenses
 
0.4

 
0.3

AICF interest income, net
 
(0.2
)
 
(0.3
)
Tax adjustments1
 
12.0

 
14.4

Adjusted net operating profit
 
$
90.2

 
$
79.9

 
 
 
 
 
1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
18



NON-US GAAP FINANCIAL MEASURES
directorretirementsan_image1.jpg
 

Adjusted diluted earnings per share
 
Three Months Ended 30 June
 
 
FY20
 
FY19
Adjusted net operating profit (US$ millions)
 
$
90.2

 
$
79.9

Weighted average common shares outstanding - Diluted (millions)
 
443.3

 
443.0

Adjusted diluted earnings per share (US cents)
 
20

 
18


Adjusted effective tax rate
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
Operating profit before income taxes
 
$
118.6

 
$
121.5

Asbestos:
 
 
 
 
Asbestos adjustments
 
(8.5
)
 
(25.1
)
AICF SG&A expenses
 
0.4

 
0.3

AICF interest income, net
 
(0.2
)
 
(0.3
)
Adjusted operating profit before income taxes
 
$
110.3

 
$
96.4

 
 
 
 
 
Income tax expense
 
(32.1
)
 
(30.9
)
Tax adjustments1
 
12.0

 
14.4

Adjusted income tax expense
 
$
(20.1
)
 
$
(16.5
)
Effective tax rate
 
27.1
%
 
25.4
%
Adjusted effective tax rate
 
18.2
%
 
17.1
%
 
 
 
 
 
1 Includes tax adjustments related to the amortization benefit of certain US intangible assets, asbestos, and other tax adjustments


Adjusted EBITDA excluding Asbestos
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
EBIT
 
$
132.5

 
$
131.9

Depreciation and amortization
 
31.6

 
28.1

Adjusted EBITDA
 
$
164.1

 
$
160.0

Asbestos:
 
 
 
 
Asbestos adjustments
 
(8.5
)
 
(25.1
)
AICF SG&A expenses
 
0.4

 
0.3

Adjusted EBITDA excluding Asbestos
 
$
156.0

 
$
135.2



Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
19



NON-US GAAP FINANCIAL MEASURES
directorretirementsan_image1.jpg
 

Adjusted selling, general and administrative expenses (“Adjusted SG&A”)
US$ Millions
Three Months Ended 30 June
 
 
FY20
 
FY19
SG&A expenses
 
$
101.5

 
$
104.9

Excluding:
 
 
 
 
AICF SG&A expenses
 
(0.4
)
 
(0.3
)
Adjusted SG&A expenses
 
$
101.1

 
$
104.6

Net sales
 
656.8

 
651.0

SG&A expenses as a percentage of net sales
 
15.5
%
 
16.1
%
Adjusted SG&A expenses as a percentage of net sales
 
15.4
%
 
16.1
%


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
20



SUPPLEMENTAL FINANCIAL INFORMATION
directorretirementsan_image1.jpg
 


As set forth in Note 9 of the condensed consolidated financial statements, the net AFFA liability, while recurring, is based on periodic actuarial determinations, claims experience and currency fluctuations. The Company’s management measures its financial position, operating performance and year-over-year changes in operating results with and without the effect of the net AFFA liability.

Further, the Company's annual payment to AICF is determined by reference to the free cash flow as defined in the AFFA. Free cash flow for these purposes is defined as the Company's operating cash flow, based on US GAAP as of 21 December 2004. As there have been changes to US GAAP since the AFFA was entered into, the annual payment is no longer based upon the current US GAAP operating cash flow statement.

Accordingly, management believes that the following non-GAAP information is useful to it and investors in evaluating the company’s financial position and ongoing operating financial performance, as well as estimating the annual payment due to AICF. The following non-GAAP tables should be read in conjunction with the condensed consolidated financial statements and related notes contained therein.

James Hardie Industries plc
Supplementary Financial Information
30 June 2019
(Unaudited)

US$ Millions
 
Total Excluding Asbestos Compensation
 
Asbestos
Compensation
 
As Reported
(US GAAP)
Restricted cash and cash equivalents – Asbestos  
 
$

 
$
35.8

 
35.8

Restricted short term investments – Asbestos  
 

 

 

Insurance receivable – Asbestos1
 

 
47.2

 
47.2

Workers compensation asset – Asbestos1
 

 
27.5

 
27.5

Deferred income taxes – Asbestos
 

 
340.1

 
340.1

Asbestos liability1
 

 
1,051.9

 
1,051.9

Workers compensation liability – Asbestos1
 

 
27.5

 
27.5

Income taxes payable1
 
51.4

 
(5.0
)
 
46.4

Asbestos adjustments
 

 
8.5

 
8.5

Selling, general and administrative expenses
 
(101.1
)
 
(0.4
)
 
(101.5
)
Net interest (expense) income
 
(13.9
)
 
0.2

 
(13.7
)
Income tax (expense) benefit
 
(31.9
)
 
(0.2
)
 
(32.1
)
1 The amounts shown on these lines are a summation of both the current and non-current portion of the respective asset or liability as presented on our consolidated balance sheets.


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
21



SUPPLEMENTAL FINANCIAL INFORMATION
directorretirementsan_image1.jpg
 


James Hardie Industries plc
Supplementary Statements of Cash Flows
For the Three Months Ended
30 June 2019
(Unaudited)
US$ Millions
 
US GAAP
as of
21 December 2004
 
Reconciling Items to Current US GAAP
 
As Reported
Cash Flows From Operating Activities
 
 
 
 
 
 
Net income
 
$
86.5

 
$

 
$
86.5

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
Depreciation and amortization
 
31.6

 

 
31.6

Lease expense
 

 
4.6

 
4.6

Deferred income taxes
 
19.0

 

 
19.0

Stock-based compensation
 
2.6

 

 
2.6

Asbestos adjustments
 
(8.5
)
 

 
(8.5
)
Other, net
 
3.3

 

 
3.3

Changes in operating assets and liabilities:
 
 
 


 
 
Restricted cash and cash equivalents - Asbestos
 
21.0

 
(21.0
)
 

Accounts and other receivables
 
(4.7
)
 

 
(4.7
)
Inventories
 
4.7

 

 
4.7

Lease assets and liabilities, net
 

 
(4.3
)
 
(4.3
)
Prepaid expenses and other assets
 
(8.6
)
 

 
(8.6
)
Insurance receivable - Asbestos
 
3.4

 

 
3.4

Accounts payable and accrued liabilities
 
44.1

 

 
44.1

Asbestos liability
 
(24.4
)
 
24.4

 

Claims and handling costs paid - Asbestos

 

 
(24.4
)
 
(24.4
)
Income taxes payable
 
7.4

 

 
7.4

Other accrued liabilities
 
(16.3
)
 
(0.2
)
 
(16.5
)
Net cash provided by (used in) operating activities
 
$
161.1

 
$
(20.9
)
 
$
140.2

 
 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
 
 
Purchases of property, plant and equipment
 
$
(63.3
)
 

 
$
(63.3
)
Proceeds from sale of property, plant and equipment
 
4.5

 

 
4.5

Capitalized interest
 
(2.0
)
 

 
(2.0
)
Proceeds from sale of restricted short-term investments - Asbestos

 

 
17.5

 
17.5

Net cash (used in) provided by investing activities
 
$
(60.8
)
 
$
17.5

 
$
(43.3
)
 
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
 
Proceeds from credit facilities
 
$
20.0

 

 
$
20.0

Repayments of credit facilities
 
(100.0
)
 

 
(100.0
)
Repayment of finance lease obligations and borrowings
 

 
(0.1
)
 
(0.1
)
Net cash used in financing activities
 
$
(80.0
)
 
$
(0.1
)
 
$
(80.1
)
Effects of exchange rate changes on cash and cash equivalents, restricted cash and restricted cash - Asbestos
 
(2.9
)
 
(0.5
)
 
(3.4
)
Net increase (decrease) in cash and cash equivalents, restricted cash and restricted cash - Asbestos
 
$
17.4

 
$
(4.0
)
 
$
13.4


Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
22


FORWARD-LOOKING STATEMENTS
directorretirementsan_image1.jpg
 
 


This Management’s Analysis of Results contains forward-looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward-looking statements in its periodic reports filed with or furnished to the Securities and Exchange Commission, on Forms 20-F and 6-K, in its annual reports to shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and other written materials and in oral statements made by the Company’s officers, directors or employees to analysts, institutional investors, existing and potential lenders, representatives of the media and others. Statements that are not historical facts are forward-looking statements and such forward-looking statements are statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Examples of forward-looking statements include:
statements about the Company’s future performance;
projections of the Company’s results of operations or financial condition;
statements regarding the Company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products;
expectations concerning the costs associated with the suspension or closure of operations at any of the Company’s plants and future plans with respect to any such plants;
expectations concerning the costs associated with the significant capital expenditure projects at any of the Company’s plants and future plans with respect to any such projects;
expectations regarding the extension or renewal of the Company’s credit facilities including changes to terms, covenants or ratios;
expectations concerning dividend payments and share buy-backs;
statements concerning the Company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges;
uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark;
statements regarding tax liabilities and related audits, reviews and proceedings;
statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings;
expectations about the timing and amount of contributions to AICF, a special purpose fund for the compensation of proven Australian asbestos-related personal injury and death claims;
expectations concerning the adequacy of the Company’s warranty provisions and estimates for future warranty-related costs;
statements regarding the Company’s ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third-party recoveries; and
statements about economic conditions, such as changes in the US economic or housing market conditions or changes in the market conditions in the Asia Pacific region, the levels of new home construction and home renovations, unemployment levels, changes in consumer income, changes or stability in housing values, the availability of mortgages and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates, and builder and consumer confidence.
Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward-looking statements and all such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.
Forward-looking statements are based on the Company’s current expectations, estimates and assumptions and because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the Company’s control. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward-looking statements. These factors, some of which are discussed under “Risk Factors” in Section 3 of the Form 20-F filed with the Securities and Exchange Commission on 21 May 2019 and subsequently amended on 8 August 2019, include, but are not limited to: all matters relating to or arising out of the prior manufacture of products that contained asbestos by current and former Company subsidiaries; required contributions to AICF, any shortfall in AICF and the effect of currency exchange rate movements on the amount recorded in the Company’s financial statements as an asbestos liability; the continuation or termination of the governmental loan facility to AICF; compliance with and changes in tax laws and treatments; competition and product pricing in the markets in which the Company operates; the consequences of product failures or defects; exposure to environmental, asbestos, putative consumer class action or other legal proceedings; general economic and market conditions; the supply and cost of raw materials; possible increases in competition and the potential that competitors could copy the Company’s products; reliance on a small number of customers; a customer’s inability to pay; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; currency exchange risks; dependence on customer preference and the concentration of the Company’s customer base on large format retail customers, distributors and dealers; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; possible inability to renew credit facilities on terms favorable to the Company, or at all; acquisition or sale of businesses and business segments; changes in the Company’s key management personnel; inherent limitations on internal controls; use of accounting estimates; the integration of Fermacell into our business; and all other risks identified in the Company’s reports filed with Australian, Irish and US securities regulatory agencies and exchanges (as appropriate). The Company cautions you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially from those referenced in the Company’s forward-looking statements. Forward-looking statements speak only as of the date they are made and are statements of the Company’s current expectations concerning future results, events and conditions. The Company assumes no obligation to update any forward-looking statements or information except as required by law.

Management's Analysis of Results: James Hardie - 1st Quarter Fiscal Year 2020
23

EX-99.4 5 ex994q1fy20managementpre.htm EXHIBIT 99.4 ex994q1fy20managementpre
Exhibit 99.4 Q1 FY20 MANAGEMENT PRESENTATION 9 August 2019


 
James Hardie Q1 FY20 Results CAUTIONARY NOTE ON FORWARD‐LOOKING STATEMENTS This Management Presentation contains forward‐looking statements. James Hardie Industries plc (the “Company”) may from time to time make forward‐ looking statements in its periodic reports filed with or furnished to the SecuritiesandExchangeCommission,onForms20‐Fand6‐K,initsannualreports to shareholders, in offering circulars, invitation memoranda and prospectuses, in media releases and other written materials and in oral statements made by the Company’s officers, directors or employees to analysts, institutional investors, existing and potential lenders, representatives of the media and others. Statements that are not historical facts are forward‐looking statements and such forward‐looking statements are statements made pursuantto the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward‐looking statements include: • statements about the Company’s future performance; • projections of the Company’s results of operations or financial condition; • statements regarding the Company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products; • expectations concerning the costs associated with the suspension or closure of operations at any of the Company’s plants and future plans with respect to any such plants; • expectations concerning the costs associated with the significant capital expenditure projects at any of the Company’s plants and future plans with respect to any such projects; • expectations regarding the extension or renewal of the Company’s credit facilities including changes to terms, covenants or ratios; • expectations concerning dividend payments and share buy‐backs; • statements concerning the Company’s corporate and tax domiciles and structures and potential changes to them, including potential tax charges; • uncertainty from the expected discontinuance of LIBOR and transition to any other interest rate benchmark; • statements regarding tax liabilities and related audits, reviews and proceedings; • statements regarding the possible consequences and/or potential outcome of legal proceedings brought against us and the potential liabilities, if any, associated with such proceedings; • expectations about the timing and amount of contributions to Asbestos Injuries Compensation Fund (AICF), a special purpose fund for the compensation of proven Australian asbestos‐related personal injury and death claims; • expectations concerning the adequacy of the Company’s warranty provisions and estimates for future warranty‐related costs; • statements regarding the Company’s ability to manage legal and regulatory matters (including but not limited to product liability, environmental, intellectual property and competition law matters) and to resolve any such pending legal and regulatory matters within current estimates and in anticipation of certain third‐party recoveries; and • statements about economic conditions, such as changes in the US economic or housing recovery or changes in the market conditions in the Asia Pacific region, the levels of new home construction and home renovations, unemployment levels, changes in consumer income, changes or stability in housing values, the availability of mortgages and other financing, mortgage and other interest rates, housing affordability and supply, the levels of foreclosures and home resales, currency exchange rates, and builder and consumer confidence. Page 2


 
James Hardie Q1 FY20 Results CAUTIONARY NOTE ON FORWARD‐LOOKING STATEMENTS   (continued) Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “aim,” “will,” “should,” “likely,” “continue,” “may,” “objective,” “outlook” and similar expressions are intended to identify forward‐looking statements but are not the exclusive means of identifying such statements. Readers are cautioned not to place undue reliance on these forward‐looking statements and all such forward‐looking statements are qualified in their entirety by reference to the following cautionary statements. Forward‐looking statements are based on the Company’s current expectations, estimates and assumptions and because forward‐looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the Company’s control. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by these forward‐looking statements. These factors, some of which are discussed under “Risk Factors”inSection3oftheForm20‐FfiledwiththeSecuritiesandExchange Commission on 21 May 2019 and subsequently amended on 8 August 2019, include, but are not limited to: all matters relating to or arising out of the prior manufacture of products that contained asbestos by current and former Company subsidiaries; required contributions to AICF, any shortfall inAICF and the effect of currency exchange ratemovementsontheamountrecordedin the Company’s financial statements as an asbestos liability; the continuation or termination of the governmental loan facility to AICF; compliance with and changes in tax laws and treatments; competition and product pricing in the markets in which the Company operates; the consequences of product failures or defects; exposure to environmental, asbestos, putative consumer class action or other legal proceedings; general economic and market conditions; the supply and cost of raw materials; possible increases in competition and the potential that competitors could copy the Company’s products; reliance on a small number of customers; a customer’s inability to pay; compliance with and changes in environmental and health and safety laws; risks of conducting business internationally; compliance with and changes in laws and regulations; currency exchange risks; dependence on customer preference and the concentration of the Company’s customer base on large format retail customers, distributors and dealers; dependence on residential and commercial construction markets; the effect of adverse changes in climate or weather patterns; possible inability to renew credit facilities on terms favorable to the Company, or at all; acquisition or sale of businesses and business segments; changes in the Company’s key management personnel; inherent limitations on internal controls; use of accounting estimates; the integration of Fermacell into our business; and all other risks identified in the Company’s reports filed with Australian, Irish and US securities regulatory agencies and exchanges (as appropriate). The Company cautions you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially from those referenced in the Company’s forward‐looking statements. Forward‐looking statements speak only as of the date they are made and are statements of the Company’s current expectations concerning future results, events and conditions. The Company assumes no obligation to update any forward‐looking statements or information except as required by law. Page 3


 
James Hardie Q1 FY20 Results USE OF NON‐GAAP FINANCIAL INFORMATION;    AUSTRALIAN EQUIVALENT TERMINOLOGY This Management Presentation includes financial measures that are not considered a measure of financial performance under generally accepted accounting principles in the United States (US GAAP). These financial measures are designed to provide investors with an alternative method for assessing our performance from on‐going operations, capital efficiency and profit generation. Management uses these financial measures for the same purposes. These financial measures include: • Adjusted EBIT; • Europe Building Products Segment Adjusted EBIT excluding costs associated with the acquisition; • Adjusted EBIT margin; • Europe Building Products Segment Adjusted EBIT margin excluding costs associated with the acquisition; • Adjusted net operating profit; • Adjusted diluted earnings per share; • Adjusted operating profit before income taxes; • Adjusted income tax expense; • Adjusted effective tax rate; • Adjusted EBITDA; • Adjusted EBITDA excluding Asbestos; and • Adjusted selling, general and administrative expenses (“Adjusted SG&A”). These financial measures are or may be non‐US GAAP financial measures as definedintherulesoftheU.S.SecuritiesandExchangeCommissionandmayexclude or include amounts that are included or excluded, as applicable, in the calculation of the most directly comparable financial measures calculated in accordance with US GAAP. These non‐GAAP financial measures should not be considered to be more meaningful than the equivalent US GAAP measure. Management has included such measures to provide investors with an alternative method for assessing its operating results in a manner that is focused on the performance of its ongoing operations and excludes the impact of certain legacy items, such as asbestos adjustments. Additionally, management uses such non‐GAAP financial measures for the same purposes. However, these non‐GAAP financial measures are not prepared in accordance with US GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation. For additional information regarding the non‐GAAP financial measures presented in this Management Presentation, including a reconciliation of each non‐GAAP financial measure to the equivalent US GAAP measure, see the slide titled “Non‐US GAAP Financial Measures” included in the Appendix to this Management Presentation. In addition, this Management Presentation includes financial measures and descriptions that are considered to not be in accordance with US GAAP, butwhichare consistent with financial measures reported by Australian companies, such as operating profit, EBIT and EBIT margin. Since the Company prepares its Condensed Consolidated Financial Statements in accordance with US GAAP, the Company provides investors with a table and definitions presenting cross‐references between each US GAAP financial measure used in the Company’s Condensed Consolidated Financial Statements to the equivalent non‐US GAAP financial measure used in this Management Presentation. See the section titled “Non‐US GAAP Financial Measures” included in the Appendix to this Management Presentation. Page 4


 
James Hardie Q1 FY20 Results AGENDA • Group Operating Review Dr Jack Truong, CEO • Financial Review  Matt Marsh, EVP and CFO • Strategy Update Dr Jack Truong, CEO • Questions and Answers Page 5


 
• Xxx • Xxx GROUP OPERATING REVIEW – DR JACK TRUONG, CEO


 
James Hardie Q1 FY20 Results Q1 FY20 GROUP RESULTS OVERVIEW Q1'20 • North America delivered very good volume 957.2 mmsf growth in a down market Sales Volume 2% • North America EBIT margin at the top end of US$656.8 M our range Net Sales 1% • Europe continued to deliver strong top line US$124.4 M Adjusted EBIT1 growth 16% Adjusted Net Operating US$90.2 M • APAC delivered solid financial results despite Profit2 13% weakening Australian housing market 1 Excludes asbestos related expenses and adjustments 2 Excludes asbestos related expenses and adjustments and tax adjustments Very good performance in all three geographies Page 7


 
James Hardie Q1 FY20 Results Q1 FY20 NORTH AMERICA SUMMARY Q1'20 • We expect underlying addressable housing market to be slightly positive for full year FY20 612.7 mmsf Sales Volume 4% • Exteriors volume grew 5%, showing continuous improvement in primary demand growth US$452.3 M Net Sales 4% • Interiors volume declined 3%; a marked improvement compared to the previous four US$113.5 M quarters EBIT 6% • EBIT Margin at top of our target range 25.1 % EBIT Margin 0.4 pts Commercial transformation and implementation of lean  manufacturing are moving in the right direction Page 8


 
James Hardie Q1 FY20 Results Q1 FY20 EUROPE SUMMARY Q1'20 • Very good revenue growth; up 7% in Euros 210.1 mmsf Sales Volume FLAT • Fiber Cement revenue increased 37% in Euros versus prior corresponding period €85.4 M Net Sales 7% • EBIT Margin Excluding¹ of 10.7%, in line with internal targets and on track to deliver full year EBIT Margin €9.1 M EBIT Excluding1 accretion -4% 10.7 % EBIT Margin Excluding1 -1.2 pts 1 Excludes integration costs and FY19 transaction costs and inventory fair value adjustment Europe continues to perform well with increased Fiber Cement  momentum Page 9


 
James Hardie Q1 FY20 Results Q1 FY20 APAC SUMMARY Q1'20 • Solid financial results despite significant softening of 134.4 mmsf Australian housing market Sales Volume -3% • Strong volume growth in the Philippines A$154.4 M Net Sales FLAT • EBIT and EBIT Margin continue to be impacted by A$35.4 M input cost inflation and higher freight EBIT -6% 23.0 % EBIT Margin -1.2 pts Proactive management through a market downturn Page 10


 
James Hardie Q1 FY20 Results FY20 KEY ASSUMPTIONS & MARKET OUTLOOK North AmericaEurope Asia Pacific Modest growth in the US  Slight housing market growth  Addressable housing market  housing market across addressable market in Australia is contracting US Residential Housing starts  Introduction of new fiber  APAC volume: 3‐5% growth  forecast between 1.2 and 1.3  cement products for Europe above the market million EBIT Margin accretion2 EBIT Margin in the top half of  EBIT Margin at the top of our  our stated range of 20 to 25%3 stated range of 20 to 25%1 Exteriors volume: 3‐5% PDG Note: Changes to key assumptions and outlook statements from those provided in our Q4 FY19 results presentation are indicated in bold text above. 1 Expectation is based upon the Company continuing to improve operating performance in our plants, improved net average sales price and mix, flattening of input costs and modest underlying housing growth 2 Expectation is based upon the Company continuing to improve operating performance in our plants and slight underlying housing growth 3 Expectation is based upon the Company continuing to improve operating performance in our plants, higher net average sales price and mix, continued inflation for input costs and volume growth above a decreasing addressable housing market Page 11


 
FINANCIAL REVIEW – MATT MARSH, EVP AND CFO Page 12


 
James Hardie Q1 FY20 Results RESULTS – 1ST QUARTER FY20 Three Months Ended 30 June Net sales increased 1%, US$5.8 million US$ Millions Q1'20 Q1'19 % Change • Exterior growth above market in the North America Fiber Cement segment Sales volume 957.2 938.6 2 • Asia Pacific Fiber Cement segment impacted by continued Net sales 656.8 651.0 1 Australian market softening Gross profit 233.1 221.1 5 • Higher net sales in Europe Building Products segment EBIT 132.5 131.9 FLAT Net operating Gross profit increased 5%, gross margin % up 150bps 86.5 90.6 (5) profit Operating cash 140.2 107.5 30 flow Adjusted net operating profit2 increased 13% • North America Fiber Cement EBIT increased 6% Adjusted EBIT 1 124.4 107.1 16 • Asia Pacific Fiber Cement EBIT decreased 12% Adjusted Net • Europe Building Products EBIT increased 272% 90.2 79.9 13 Operating Profit 2 1 Excludes asbestos related expenses and adjustments 2 Excludes asbestos related expenses and adjustments, and tax adjustments Page 13


 
James Hardie Q1 FY20 Results NORTH AMERICA FIBER CEMENT SUMMARY Q1'20 Volume 612.7 mmsf Sales Volume • Exteriors volumes +5% compared to pcp 4% • Interiors volumes ‐3% compared to pcp US$452.3 M Net Sales Price 4% • Favorably impacted by annual change in strategic US$731 per msf Average Price pricing, partially offset by tactical pricing 1% EBIT US$113.5 M EBIT • Higher net sales 6% • Partially offset by higher input costs 25.1 % • Improved plant performance EBIT Margin 0.4 pts • SG&A as a % of revenue down Page 14


 
James Hardie Q1 FY20 Results NORTH AMERICA FIBER CEMENT Quarterly  EBIT and EBIT Margin 120 30 100 25 80 20 60 15 EBIT US$M 40 10 EBIT Margin 20 5 0 0 FY15 FY16 FY17 FY18 FY19 FY20 EBIT EBIT/Sales Q1 FY20 EBIT Margin % up 40 bps to 25.1% compared  to pcp and at the top end of our target range Page 15


 
James Hardie Q1 FY20 Results NORTH AMERICA INPUT COSTS Quarterly US Input Costs 1,600 10 • The price of NBSK pulp down 1% compared to pcp 9 1,400 • Price down 6% compared to Q4 FY19 8 1,200 • 7 Freight prices down 16% compared to pcp 1,000 6 800 5 • Cement prices up 3% compared to pcp Pulp Prices ($) 4 600 3 400 Cement, Gas, Electric  and Freight Prices ($) 2 • Gas prices up 22% compared to pcp 200 1 0 0 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 • Electric prices down 3% compared to pcp PULP GAS ELECTRIC CEMENT FREIGHT The information underlying the table above is sourced as follows: • Pulp – Cost per ton – from RISI • Gas – Cost per thousand cubic feet for industrial users – from US Energy Information Administration  • Electric – Cost per thousand kilowatt hour for industrial users – from US Energy Information Administration • Cement – Relative index from the Bureau of Labor Statistics • Freight – Cost per mile – from Dial‐a‐Truck Solutions • Gas and Electric prices for current quarter are based on prior quarter actuals Page 16


 
James Hardie Q1 FY20 Results ASIA PACIFIC FIBER CEMENT SUMMARY  Q1'20 134.4 mmsf Volume Sales Volume -3% • Positive PDG in Australia despite continued softening A$154.4 M of the housing market Net Sales FLAT • Strong sales volume growth in the Philippines A$1,018 per msf Average Price EBIT 2% • Impacted by higher input costs and unfavorable New US$24.8 M EBIT Zealand plant performance -12% • Partially offset by higher average net sales price in A$35.4 M EBIT Australian dollars -6% • Segment results in US dollars impacted by unfavorable 23.0 % EBIT Margin -1.2 pts foreign exchange rate movements Page 17


 
James Hardie Q1 FY20 Results ASIA PACIFIC FIBER CEMENT (LOCAL CURRENCY) Australia • Gained market penetration despite a soft market • EBIT decrease primarily driven by lower net sales New Zealand • EBIT impacted by higher input costs and unfavorable plant performance Philippines • Volume increase driven by market penetration • EBIT unfavorably impacted by higher input costs Page 18


 
James Hardie Q1 FY20 Results EUROPE BUILDING PRODUCTS SUMMARY Q1'20 210.1 mmsf Net Sales Sales Volume FLAT • Net sales in Euros increased 7% €85.4 M • Fiber cement net sales in Euros increased 37% Net Sales 7% €315 per msf 1 Average Price EBIT Excluding in Euros 4% • Higher gross margin US$7.9 M EBIT • Higher SG&A costs associated with building out the 272% corporate functions and exiting the TSAs US$10.3 M • €2.0 million of integration costs in Q1 FY20 EBIT Excluding1 -10% • EBIT Margin Excluding1 of 10.7% in line with internal targets €9.1 M EBIT Excluding1 -4% 10.7 % EBIT Margin Excluding1 -1.2 pts 1 Excludes integration costs and FY19 transaction costs and inventory fair value adjustment Page 19


 
James Hardie Q1 FY20 Results SEGMENT EBIT – 1ST QUARTER FY20 Other Businesses 1 Research and Development (10) 0.4 (7.4) 0 (6.1) (6.2) (5) (1) US$ Millions US$ Q1 EBIT US$ Millions US$ Q1 EBIT (1.5) (2) (1.8) 0 FY18 FY19 FY20 FY18 FY19 FY20 Exited Windows business Committed to R&D investment General Corporate Costs1 (20) (14.9) (16.0) (15) • Unfavorable movements due to foreign exchange (9.8) (10) • Higher stock compensation expense Q1 EBIT US$ Millions US$ (5) 0 FY18 FY19 FY20 General Corporate Costs in line with expectations 1 Excludes asbestos related expenses and adjustments Page 20


 
James Hardie Q1 FY20 Results INCOME TAX Three Months Ended 30 June 18.2% adjusted effective tax rate for the quarter • Increase in adjusted income tax expense driven by a US$ Millions Q1'20 Q1'19 change in the geographical mix of earnings, including the Operating profit before taxes 118.6 121.5 accounting treatment related to the amortization benefit Asbestos adjustments1 (8.3) (25.1) of intangible assets Adjusted operating profit before 110.3 96.4 income taxes • Income taxes are not currently paid or payable in Australia due to tax losses. Australian tax losses primarily Adjusted income tax expense2 (20.1) (16.5) result from deductions relating to contributions to AICF Adjusted effective tax rate 18.2% 17.1% Income tax expense (32.1) (30.9) Income taxes paid 2.6 4.2 Income taxes payable3 46.4 34.0 1 Includes asbestos adjustments, AICF SG&A expenses and net AICF interest income 2 Includes tax adjustments related to asbestos, the amortization benefit of certain US intangible assets and other tax adjustments 3 Includes non‐current US income taxes payable of US$25.2 million as of 30 June 2019 related to the deemed repatriation promulgated by the US Tax Cuts and Jobs Act and will be paid in annual installments through FY25 Page 21


 
James Hardie Q1 FY20 Results FINANCIAL MANAGEMENT FRAMEWORK Strong Financial Management Disciplined Capital Allocation Liquidity and Funding • Strong margins and operating cash flows • Invest in R&D and capacity expansion to  • Conservative leveraging of balance sheet  support organic growth at a target within 1‐2 times Adjusted  • Strong governance and transparency EBITDA excluding asbestos.  • Maintain ordinary dividends within the  • Investment‐grade financial management  defined payout ratio • US$500 million unsecured  revolving credit facility;  • Flexibility for: • US$800m senior unsecured notes  • Cyclical market volatility at Q1 FY20;  • Accretive and strategic inorganic  • €400m (US$454.6m) senior  opportunities or further shareholder  unsecured notes at Q1 FY20; returns, when appropriate • At Q1 FY20, total debt had a  weighted average maturity of 6.1  Moody’s S&P Fitch years and weighted average rate  Ba1 BB BBB‐ of 4.4% affirmed Sept’18 affirmed Mar’19 affirmed Mar’19 outlook stable outlook stable outlook stable Financial management consistent with investment grade credit Ability to withstand market cycles and other unanticipated events Page 22


 
James Hardie Q1 FY20 Results CASH FLOWS1 Change US$ Millions FY20 FY19 (% ) Higher operating cash flow Net Income 86.5 90.6 (5) • Net cash inflow due to working capital 1 Adjustment for non-cash items 48.0 26.5 81 • Increase in income adjusted for non‐cash items Operating working capital2 44.1 24.8 78 • Offset by changes in operating assets and liabilities Other net operating activities (17.5) (10.0) (75) AICF cash flow, net - (0.2) Lower investing activities Cash Flow from Operations 161.1 131.7 22 • Acquisition of Fermacell in Europe in FY19 3 (65.3) (69.6) 6 Purchases of property, plant and equipment • Partially offset by decrease in fixed asset purchases Proceeds from sale of property, plant and 4.5 - equipment Acqusition of business, net of cash acquired - (558.7) Lower financing activities  Free Cash Flow4 100.3 (496.6) • Lower proceeds due to Fermacell acquisition in FY19 Net repayments to credit facilities (80.0) (100.0) 20 • Partially offset by lower net repayments to credit  Proceeds from 364-day term loan facility - 492.4 facilities Free Cash Flow after Financing Activities 20.3 (104.2) 1 Derived from supplementary statement of cash flow 2 Excludes AP related to capital expenditures 3 Includes capitalized interest  4 Distinct from the term defined by the AFFA for purposes of calculating our annual contribution to AICF Page 23


 
James Hardie Q1 FY20 Results LIQUIDITY PROFILE AT 30 JUNE 2019 Strong balance sheet Debt Profile • US$96.1 million cash Millions • US$1,210.1 million net debt 3 • US$420.5 million available on revolving credit facility US$250 1 Corporate debt structure US$500  US$70 • US$400 million 4.75% senior unsecured notes maturing 2025 €400/  €400/  2 2 US$455 US$455 • US$400 million 5.00% senior unsecured notes maturing 2028 • €400 million (US$454.6)2 3.625 % senior unsecured notes, maturing  US$800  US$800 2026 • US$500 million unsecured revolving credit facility, maturing 2022 Available Facilities Outstanding  Debt US Senior Notes EUR Senior Notes Leverage strategy Bank Facilities Accordion • ~2.2x net debt to Adjusted EBITDA excluding asbestos; temporarily  1 Incremental liquidity of up to US$250 million may be accessed via an accordion feature, which is  outside of the 1‐2x leverage target range provided for under the terms of the syndicated revolving credit facility agreement, but not credit  approved 2 Based on exchange rate as of 30 June 2019 3 Includes debt issuance costs (US$18.4 million) On track, and committed to returning to our 1‐2x leverage target range  Page 24


 
James Hardie Q1 FY20 Results CAPITAL EXPENDITURES CAPEX Spend CAPEX spend of US$63.3 million; decreased US$4.5 million  100 compared to pcp 90 80 • North America capacity projects 70 60 • Continued start‐up of Tacoma greenfield expansion 50 • Continued construction of our Prattville facility US$ Millions 40 30 • Continued expansion within our ColorPlus product line  20 10 • Asia Pacific capacity projects 0 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 • Continued Carole Park brownfield expansion project Capacity Maintenance & Other Page 25


 
James Hardie Q1 FY20 Results FY20 KEY ASSUMPTIONS, MARKET OUTLOOK & GUIDANCE North AmericaEurope Asia Pacific Modest growth in the US  Slight housing market growth  Addressable housing market  housing market across addressable market in Australia is contracting US Residential Housing starts  Introduction of new fiber  APAC volume: 3‐5% growth  forecast between 1.2 and 1.3  cement products for Europe above the market million EBIT Margin accretion2 EBIT Margin in the top half of  EBIT Margin at the top of our  our stated range of 20 to 25%3 stated range of 20 to 25%1 Exteriors volume: 3‐5% PDG Management expects full year Adjusted net operating profit to be between  US$325 million and US$365 million 1 Expectation is based upon the Company continuing to improve operating performance in our plants, improved net average sales price and mix, flattening of input costs and modest underlying housing growth 2 Expectation is based upon the Company continuing to improve operating performance in our plants and slight underlying housing growth 3 Expectation is based upon the Company continuing to improve operating performance in our plants, higher net average sales price and mix, continued inflation for input costs and volume growth above a decreasing addressable housing market Page 26


 
James Hardie Q1 FY20 Results KEY FINANCIAL MESSAGES • Good and disciplined financial performance in all three business segments • North America Fiber Cement delivered marked improvement in primary demand growth while  generating an EBIT margin at the top of our target range • Asia Pacific Fiber Cement EBIT margins were in the middle of our target range  • Europe Building Products segment delivered strong revenue growth in Euros • Adjusted EBIT of US$124.4 million (up 16% from pcp) • Adjusted NOPAT of US$90.2 million (up 13% from pcp) • We will fund US$108.9 million to AICF during the second quarter of fiscal year 2020,  as provided under the AFFA Page 27


 
STRATEGY UPDATE – DR JACK TRUONG, CEO Contents are confidential and subject to disclosure and insider trading considerations


 
James Hardie Q1 FY20 Results LONG TERM VALUE CREATION North America  • 35/90 with strong returns (20‐25% EBIT margin) Europe • €1 billion business with 20+% EBIT margin APAC • Deliver growth above market with strong returns  (20‐25% EBIT margin) Page 29


 
James Hardie Q1 FY20 Results STRATEGIC PRIORITIES : FY20 – FY22 North AmericaEurope Asia Pacific 1 Accelerate Exteriors Growth 1 Gain market traction 1 Continue to drive growth  • current fiber cement above market • new, for Europe, fiber cement 2 Drive Lean Transformation  2 Continue to drive fiber  2 Continue to drive Lean  across all ten plants gypsum market penetration manufacturing across all  four plants 3 Re‐establish Interiors as a  3 Continue to unlock existing  Growth Business manufacturing capacity in  all five plants Page 30


 
James Hardie Q1 FY20 Results LEAN TRANSFORMATION – GLOBAL UPDATE North America • Hardie Manufacturing Operating System  (HMOS) already rolled out to 5 plants • 2 additional plants will be implemented by  30 September 2019 • On‐track to deliver US$100 million cost  savings Europe • Team visited NA plants in July • First European plant will implement HMOS  in Q3 FY20 APAC • Continuous improvement & execution • Team visiting NA plants in Q3 FY20 Standard Personal Protection Equipment rolled out at all European plants Page 31


 
James Hardie Q1 FY20 Results EUROPE UPDATE • Continue to drive sales synergies of Fiber Cement Exteriors with Fiber Gypsum Interiors • Manufacturing improvements New construction luxury development in Hertfordshire, UK utilizing ColorPlus® HardiePlank® on exteriors • Deliver EBIT accretion New construction in Eastern Switzerland utilizing ColorPlus® HardiePlank® on the  exteriors and Fermacell fiber gypsum interior wall linings Page 32


 
James Hardie Q1 FY20 Results AUSTRALIA: GROWTH ABOVE MARKET ‐ UPDATE • Market Trends • Labor shortage • Less space / smaller lot sizes • Lightweight construction • Take share from Brick • Continue to deliver sustained  A modern mixed material home built using James Hardie’s Scyon® range,  Growth Above Market EasyLap® and HardieTex® (NSW) (Left) Historically typical brick single family home construction in Australia.   (Above) An affordable “Hamptons” home targeting millennials using James  Hardie Linea® (QLD) Page 33


 
QUESTIONS Contents are confidential and subject to disclosure and insider trading considerations


 
APPENDIX


 
James Hardie Q1 FY20 Results FY20 GUIDANCE • Management notes the range of analysts’ forecasts for net operating profitexcluding asbestos for the year ending 31 March 2020 is between US$328 million and US$360 million, with a mean of US$344 million • Management expects full year Adjusted net operating profit to be between US$325 million and US$365 million assuming, among other things, housing conditions in the UnitedStatesremainconsistentandinlinewithourassumedforecastofnew construction starts, input prices remain consistent, and an average USD/AUD exchange rate that is at or near current levels for the remainder of the year • Management is unable to forecast the comparable US GAAP financial measure due to uncertainty regarding the impact of actuarial estimates on asbestos‐related assets and liabilities in future periods Page 36


 
James Hardie Q1 FY20 Results NORTH AMERICA FIBER CEMENT Average Net Sales Price 750 731  718 698 700 666 669 665 US$ per MSF 650 600 FY15 FY16 FY17 FY18 FY19 Q1 FY20 • FY20 strategic price increase effective April 2019 • Overall, satisfied with price positioning Page 37


 
James Hardie Q1 FY20 Results TRANSLATION IMPACT ON CONSOLIDATED RESULTS Excluding Translation As R e porte d Translation Impact 2 Impact 1 US$ Millions Q1 FY20 Q1 FY19 % Change Q1 FY20 % Change $ Unfav % Net Sales $ 656.8 $ 651.0  1% $ 669.9  3% (13.1)  2% Gross Profit 233.1 221.1  5% 237.4  7% (4.3)  2% Adjusted EBIT 124.4 107.1  16% 126.4  18% (2.0)  2% Adjusted net operating profit $ 90.2 $ 79.9  13% $ 91.0  14% (0.8)  1% 1 As reported Q1 FY20 figures converted using Q1 FY19 average exchange rates 2 Reflects the difference between Q1 FY20 As Reported and Q1 FY20 using Q1 FY19 average exchange rates Page 38


 
James Hardie Q1 FY20 Results ASIA PACIFIC FIBER CEMENT RESULTS AUD vs USD Three Months Ended 30 June FY20 Re sults in Re sults in Impact of AUD USD FX Averge net sales price per unit +2% -5% -7% (per msf) Net sales FLAT -8% -8% Gross profit -5% -12% -7% EBIT -6% -12% -6% Page 39


 
James Hardie Q1 FY20 Results FINANCIAL SUMMARY Three Months Ended 30 June US$ Millions Q1'20 Q1'19 % Change Net Sales North America Fiber Cement$