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James Hardie Industries (JHX)

Participants
Jack Truong Chief Executive Officer
Jason Miele Chief Financial Officer
Peter Steyn Macquarie
Andrew Scott Morgan Stanley
Lee Power UBS
Lisa Huynh Citi
Sophie Spartalis Bank of America
Simon Thackray Jefferies
Daniel Kang CLSA
Keith Chau MST Marquee
Peter Wilson Credit Suisse
Paul Quinn RBC Capital Markets
Call transcript
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Operator

Thank you for standing by and welcome to the James Hardie Industries, JHX, Q1 FY 2022 Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Dr. Jack Truong, Chief Executive Officer. ahead. go Please

Jack Truong

brief of good us and earnings everyone. you providing Thank I that global Good announced was our evening first joining in a now and the on Investor by call results strong Day on begin XXXX on is with past global strong quarter on consecutive our quarter growth May. for our will this Annual Xth strategy execution morning today's about market returns financial consistent based our This to above in update the fiscal call. strategy. company year delivering

Jason an our financial update CFO, up After results also full will our open and guidance. year quarter Our then on that, Miele, for questions. cover we'll the for

consumer on to from initiatives strategy. to homeowners X our such each marketing create for that consistent a on the into growth one, enable a to in strategic of brand penetrating the three and products; true remodel; and directly demand and two, brand brand Hardie turn opportunities update new three looks markets exterior into company described other and expand to our that number at innovations profitable Day driving will Page In market-leading premium fiscal Investor existing globally the focuses in to to adjacent of The repair strategic an as our from professional advantage us and number global regions. May, end three, fiscal allow take of commercializing we of growth critical our are for So let's that the our year James XXXX. initiatives XXXX our expanding number now year

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cement engineer styles provides with the James help mind upgrading and achieve all technology brand exterior's cement for and on products And colors of of projects Our durability climate fiber lasting protection. exterior major James one and Hardie return investments now our long peace offers beauty. Hardie provide number remodeling brand fiber to

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X. to Page turn now Let's

in business. A On key side, left-hand America, value high on particular North product strategy profitable Day Investor portfolio here segments. exterior across products it's and key is technology May, remodel see in this define repair page, of the we the high strategy this all three having a you current what products about we to initiatives value. this color discussed American our about in component Hardie see criteria, The focus second our line generates drive in market-led you recently to the product shift strategic for strong. in America sales Starting In with is North markets ColorPlus products, high innovations. where two for in of strategic our plus strategy customers remodel Hardie and product the is create in Cemplank Hardie products that mix. high about and the turn, in plot two homeowners brand impact, and driving in mix demand increased Hardie core as appropriate margin value demand where exterior North and into into hiding three In brand penetrate back execute drive from and value Hardie and And brand growth are to value panels. action drive mix are: to The products products adjacent R&R our of brand will expanded and technology our driving for texture Key of with us. and launched segments segments. with differentiated experience of one, awareness value product including our it penetration propositions higher a innovations, is price our

On what our this North significant see strategy the you here America. in has right on financial hand side, is had results impact recent

volume see growth price you to representing quarter period. value same Our customers can the percent and percent across teams XXXX product QX mix line mix fiscal blue of chart, The higher bars fiscal year are a XXXX, green each partnering the on for growth drive with in from QX. the year our results represents to this time

product If QX change fiscal shifting indicate mix focus of closely impact Not equally value you our through driving and our by you growth saw strong of we this growth. growth results. is XX%, the financial profitable mix high high year only XXXX, volume had customers, have What did our will see we product seen price on that X%. important, strategy significant also step in but on we successful observe at that mix partnering real with driving a value

we here, similar strong Australia, for with Expansion value manufacturing lean Zealand results. North of product the were delivering key us volume marketing enabled high and drivers costs in execution offsetting Europe in similar Asia America, inflation deliver mix to to regions, shown investment our and New had not While input leverage quarter. success along first growing have in our in and Pacific. Europe three in all It strong bottom line a the overall

Texture Fine Europe. global market Turning products in Page America, very launch of launch. May had on Textured of good Plank Panels North Hardie in in update to penetration X In all VL for XXXX, and the the Australia, announced we with new since of an innovation. traction Hardie innovations, three now Hardie and We acceptance three Cladding

We Textured Hardie that fit with that and adoption. Panels the customers continue any home homeowners North and positive. customers and want awareness to owners deliver to design Feedback overwhelmingly our partner from have contemporary drive America solutions been our need. in homestyle

look fade on two a offer California, What are Hardie What as variety Textured to coastal, you they water of to in about protection and Panels point prominent resistance out here Oregon, and see mixed home are different in how contemporary Utah. addition, four is durability, Textured in resistance. like I'd here one pictures properties from to examples in designs, In such Hardie of one design. homes these Panels

also are to augment Hardie you four market, modern homeowners to from that Cladding in in now as Australian Australia the are Texture this which What look positive. see examples prominent Turning the on design to is continent. feedback America, help can Similar see and you North of page throughout Page the Fine XX. customers very

Textured endless protection homeowners for non-combustibility. on need, Texture delivering and Hardie America, North water that Cladding in with As homeowners offer Hardie design resistance Fine while durability, Panels possibilities

across about Plank page, this Europe, to protect the very progress markets. to Hardie total how also homeowners see Plank installation Western in Plank and Hardie compared with of Hardie the savings the pleased XX. popular VL Hardie you VL VL we time UK continent. helped examples Plank provide time. becoming XX% and Moving approximately would offers mixed French product. in Plank feedback their On modern In Page to Hardie more on have save the Installers design positive I is a European been out with consistent which put VL VL look, solutions. is Where the comparative of

and continue how about innovations our excited grow markets of each and in three adjacent allow in new us to operating We’re regions. they these will penetrate large to

program our products. these While success three is excited three much early bigger global innovation innovations, these of about we're new than just the

and durability on we innovation superior to around focused to innovations endless protection our new the is team homeowners pipeline for possibilities world. additional innovation design ensure Our the have will provide with

to returns. growth consistent first Page market of for global now XX summary for our financial the ninth results consecutive above we and a strong results, Turning the is This quarter. delivered quarter

Specifically income global an adjusted three quarters. is first we regions for the prior prior US$XXX sales global in million, than XX% delivered corresponding over over delivered we more period. that is a period. quarter, results which US$XXX And important the we growth is four increase corresponding versus consecutive the million, delivered of of net net all strong Most financial of XX% which in

at Net regions growth. of EBIT million we XX.X%. As of and achieved sales are by growth. gain EBIT mix prior XX% with XX% net million, product €XXX at strong driven sales deserve EBIT to more million and growth than XX% than margin EBIT at A$XXX high straight of more organic exceptional for America three the than both growth period, quarters a very sales A$XX in Europe, of EBIT million momentum all strong million countries, growth in quarter. and performance we million Asia-Pacific all share sales In XX% deliver of In for margin for strong at the net XX.X%. net corresponding strong €XX increase good US$XXX margin a North four more more in over strong we a XX% EBIT XX.X% growth delivered than and three continued penetration value double-digit US$XXX in of

CFO, Our the was regions. strategy to in of product mix three penetration in positive drivers This regions value marketing leverage achieved turn in was all all of cost the I in bottom provide and to additional along high driving delivering like financial during innovation our line against our with manufacturing the execution on now quarter. backdrop of key would results. investments the three high input lean to higher to inflation over Jason detail

Jason Miele

been and adjusted This is on marks also including and start adjusted net morning, sales, with our global income. performance. everyone. XX% deliver globally delivered regions on leverage sales record is we simultaneously. while outstanding adjusted a sales our I’ll the fourth This to strong drive straight up quarter consecutive quarter to and able our we our Thank significantly EBITDA their were you, of to able first SG&A the results to Yet, each records companies, expansion three adjusted income results. growth EBIT margins first XX% bottom quarter cost Jack. with line with quarter, our all our improving XX% drive region EBIT ability Good again plus invested pressures. EBIT fourth global my ability good most results In we’ve view, have the leverage EBIT global results Slide with real expand evening, line and the net during results. net XX in top and like standout In inflationary for to in drive double-digit our adjusted and significant quarterly on also We strategic initiatives net expanding still the and quarter growth margin double-digit margin. net

an net adjusted in mentioned, EBIT strong growth the XX% teams customers, that Global Global into able by line our included to mix. growth stronger adjusted integration strong chain bottom even global and regions we Through line and driving net increased and This gain to first manufacturing growth translate line and results adjusted volume three in our value net our XX% lean top globally XX% improvements momentum outcome. increased was were of improved basis of global US$XXX.X price a of As expand all I improvement income all-time in to quarter. XX%. as mentioned all a to able continuous US$XXX.X mix three sales with first quarter earlier, as quarter. excellent supply net higher XX% sales EBITDA driven product totaling represents volume the successfully adjusted million XXX I top million. XX% regions record results global margin global we percent another in points were And high our income for by just

that in flow not We operating continue worth are cash to due flow strong and US$XXX.X quarter of comping noting these first It of is reflective easy cash the quarter. with generate first to prior million quarter simply results COVID.

continued was net in quarter our US$XXX.X highest last million. achieved is growth represents comp by North this integrate This net quarter of focus adjusted It team review driven net that global the Our each worth year the more net XX. only our American down first In I noting the EBIT increased only partner XX% now down significant one adjusted was by flat by another with North to period. quarter and our and This first quarter. outstanding region a sales quarter, last in ever sales customers. result against sales year. prior business. X%, with results was In detail in the included America, North income X% to delivered Page the flat will starting America on first

improvement driven of coupled even the year. million in which the to XX% to team and penetration addition partially high price adjusted initiatives US$XXX.X and for margin adjusted customers. manufacturing volume outstanding strong items XX.X%. results value particularly with the growth, results at savings. and net of organic expectation we growth X% cost sales level. step mix and gaining margin X% headwinds. as continued LEAN These by a top to continues growth, EBIT In offset investment margin These volume margin of momentum by deliver to EBIT America increased growth changed accretive full significant an double-digit EBIT products North mix better mix quarter were growth, inflationary deliver high began were The at consistent exceptional value The Price our EBIT team will by strong were line X% and our our in with by improved product

to high European €XXX.X million. net XX% XX, results focused the of mix. product as integrated Cement the acquisition. increased is in team Hardie first result. they XXXX mix in Page significant remains quarter, fourth contributed price double-digit straight now margins combination mix which improved James to delivered strong customers. net In Europe, Fermacell represents a volumes, expanding and well discuss fully sales strong Fiber momentum. third net team into the growth. the on in price since year XXXX the have fiscal to lean team fourth quarter The year with penetration improvement and a European sales our The quarter XX% start X% increased started sales the year-over-year full straight year of with The the to value quarter, improvements now Turning XX.X%. a resulted adjusted to EBIT of In of as Fiscal Europe

sales discuss move Let's Australian XX to the In first Asia-Pacific. increased quarter, in now to Page XX% net dollars.

that Asia-Pacific price shut restrictions. In to shift to first sales the Philippine was prior significant due quarter. the the quarter, percentage volumes, COVID total. for in down This You the the will of as of note was mix a the much negative due was period for Philippines

in a growth into expansion of at our penetration the XX% line results first America similar even EBIT in versus product XXX XX.X%. teams to points that prior basis New the strong margin the translated of adjusted with business, X% first EBIT North are margin mix stronger to is results top and million bottom A$XX.X high-value with customers. an mix of with quarter and were line The growth That of and Australia momentum However, we have strong Zealand as our results of Europe price achieving quarter.

million strong XX-month had operating Moving was and US$XXX.X operating to the Page XX flows flow capital flow now We to XX% cash cash and million. cash quarter trailing US$XXX.X up of first expenditures. to in operating the discuss

our a continues slide, is see of believe to machine In market that production additional totaled up best to year Production history of right saleable and sheet our track Sheet million. expenditures. one saleable capacity ramp gain XXXX. help you in two in the at the startup globally. on profitable quarter, throughout first the begin fiscal capital share expenditures Prattville, facility and us hand production and We On our machine March, capital drive summary to growth US$XX.X Alabama in the be July. continue will started to side

future US$XXX year to capacity, regions the expenditure all capacity as investment US$XXX increase to year flow products customers forward, positions gains through to over continue drive and prior end an expect drive per is This XXXX. expenditures period the at fiscal us average to we Looking Adding our share greater XXXX capital the of both three total our brownfield year million between fiscal and time, million reflects greenfield the guidance three-year in in right right to profitable to to continue users. we and and market growth. capital

discuss management we'll XX, allocation. and to Moving Page capital

cash capital objectives. strong all Our been structure on flows to us of and able our execute to have allocation capital

We directly strong market-driven to preserve to returning innovation balance growth, strengthen continue in to and and to we shareholders on focused in and investing continue to growth marketing our flexibility are capital expansion, and capacity the positioned continuing liquidity while a We financial invest including our organic to remain sheet. position homeowner.

XX Page let's to Finally, discuss turn guidance. to

in high-value confidence range, adjusted our initiatives. while penetration in and us in significant income gives further growth also Our lean market and execution net mix raising gains regions the all committing investment three combined to with guidance product continued share momentum

We Specific our points improvement US$XXX to guidance. range guidance of income adjusted year-on-year net our US$XXX million. have we're providing prior XX% of two guidance figure represents The comparable segment, The income. North revised was to year XX% and net million. to the for US$XXX in a adjusted raised range America million

fiscal growth net than year year of US$XXX investment expect expect North cost initiatives. XX%, XXXX. we of growth million American between We've US$XXX for also fiscal in in to our in versus year greater for million and are revised X% year regarding cost First, goods the XXXX, inflationary full sold, Globally, fiscal strategic and and we between inflation X%. guidance mix our goods headwinds XXXX sold, anticipating price sales we of

increased also million expect fiscal to growth invest XXXX strategic expectation for investment our in year now have We in initiatives. We initiatives. our between US$XXX to US$XXX growth million

We regions initiatives. in backdrop exceptional. aggressively in were expansion amongst and results global quarter investing three our delivered of inflation growth all first cost strategic while Our the

over now of meeting. I'll portion to our Operator the Q&A have commence We concluded prepared to remarks. the it today's hand

Operator

Steyn Instructions] Thank question comes you. [Operator Macquarie. Peter from ahead. from Please First go

Peter Steyn

on the Good evening, for Thanks your results. and congrats Jack very much Jason. time and

So bit likely the Jason, CapEx your all nascent just mentioned in a us perhaps three you more brownfield to investment you the detail of got give there intentions regions. some greenfield terms Could and where little is focus? in two questions, guidance, thinking, of

Jason Miele

high Peter, we're focused on penetration. obviously Yes, value product

And regions, we in as expansion so as through as well we as greenfield expect have Australia, in But on North as it'll capacity, innovation. lens so new earlier, to all the mentioned think do about be three capacity well America. that as Europe,

Peter Steyn

where to Europe, [indiscernible] X% we sales So a performance? are moving context in in closer you of the

Jason Miele

the That plan, is Peter.

Peter Steyn

question would just the SG&A on spaces then And that perfect. and marketing curious And up that? of second that better just expecting outcomes increased stage of function the of detail around that my to ramp guidance, a bit a have wanting than is cost a increasing obviously R&D largely investment strategic and thinking just be the spend. Okay, sort press and you've around little what that at you're been consequence of

Jack Truong

very a that's good Yes. question. Peter,

the the financial as And that's demographics need that allows data, we there's be we live really program that to us us So really as, U.S. reach the only see what the to we we campaign continue really results is as also early then, to for we as continue been innovative are a about good I that they well had that on launch line to successful, – that with that definitive operate I've products have that homeowners of homes is other part out, plan groups, commercialize. the fit to of remodeled. that which our well the that path the so full the in a very based coming expand mentioned, And Christine's those it in. second accelerate then throughout is and not the target and really and and female as right so world results in

drive that with is reinvest some it to growth that continue of with high then to being path. margin about So able able and to be

Peter Steyn

Perfect. makes Yes. sense. view. that’s And from easily That capacity meantime, see got as it point investment via the marketing in the market at and coming of the serve you’ve incremental a you you very to

Jack Truong

Correct.

Peter Steyn

I’ll leave Thanks. Perfect. it there. Appreciate it.

Jack Truong

Thanks Peter.

Operator

Thank you.

Your go next from Stanley. question comes Scott from Andrew Morgan Please ahead.

Andrew Scott

Jack and results. Jason, great and well done

your Just the of given a Jack in questions. on market price second strength, for couple this interested just year. thoughts announcing increase

Jack Truong

taken Well, annual our that beginning been only then is pricing The Andrew, do about really value difference that time price increase up line of the our we plan be year. this to year, past calendar has and same increase we will the every so moved price we always our year. with

So is path. it our that our – is

Andrew Scott

understood. Okay,

been have market increase. enough strong to a second the thought sustain might Just

Jack Truong

value value – and strategy to increase QX deliver the making strong higher price go of is sake increase saw mix you that what in than for high invoice, we more higher, Well, price that results normal that’s can the able to it that price consumers invoice much were sure the we our proposition price is increase. our customers And our the a our get – strategy. homeowners. And about that about value market products that really to is delivering really it’s and to

Andrew Scott

outcome a It Absolutely. great was there.

companies that about moment chain. We without focusing can’t industrial in talk question. on second Just supply

you in any service customers, how but inputs can So full you metrics, you if talk your in just seeing please? whether actually just that delivery are supply those is about or that talk terms of Maybe to specific interested, metrics, can for tracking? obtaining appreciation, difficulty it’s price supply. about in And not other

Jack Truong

Yes.

North I that or you in X, X – I look quarters. our volume think really that the we that America, the at Slide eight think seven show Andrew, growth past if or have

started to start well so. and market our you then is essentially a approach products that supply volume marketplace. So to allow and chain Prattville we able up to digit Jason and in America right that needs, the we’re the production the product mentioned continue I our the line just our customers marketplace make we’ll that in And with line in flow X have do able and leaned of as us going to double And from we to X. then Prattville, would be deliver that just together line the North think integration the know, to

So these are the we products our within deliver that ensure key on markets can in to the driving the that company what we the value. have serve that initiatives

Andrew Scott

Okay. That’s great. Thank you.

Jack Truong

you. Thank

Jason Miele

Andrew. Thanks,

Operator

you. Thank

go question UBS. comes from next from Your Lee Power Please ahead.

Lee Power

started there Hi Jack. love was Can because Hi seeing Thank upgrade. what guides I your a lot you. you like the to some just I’d about impact that the to now of see thoughts. Jason. it a expecting bit just top the had So pulp, them end declining? to maybe of rage, that you COGS and maybe of COGS drive freight seems talk guidance just around little inflation get

Jack Truong

good a Yes, Lee question. it’s

range more it’s of say I’d a So than of a narrowing increasing.

haven’t the better our freight lines Certainly three months bit. into obviously, So under and future. of down – while they they’ve pulp and we haven’t gotten a normalized more actuals have site belt significantly,

The around piece guidance of would that other increased guidance volumes be the spoke that that total we expectations is and in our have dollars. last since time

the go So direction. that’s opposite in

Lee Power

then And maybe seen any at you. you manufacturing. Roseville? Thank impact just sense. makes talk Have can That you Australian Okay. through lockdown about

Jack Truong

No.

Roseville to to be Fortunately and our able in to our both plant Carole able Park continue to serve customers. we're in Australia run

Lee Power

Thank Cool. you.

Operator

you. Thank

comes question Citi. from Lisa next Please Your ahead. from go Huynh

Lisa Huynh

in guys to more value Jack. products. in the America. saw about ASP talk a saw we uplift morning, pulling I good from higher Good uplift contribution forward Hi, about price annual can morning, the also North that Jason. detail ASP I'm but in interested the guess, kind of increase, little just bit we you

Jack Truong

fully really is really that the value product this quarter penetration. execute mix at we the high so Yeah, full first

Investors So have as that last is brand. to tell one-third penetrate is into remodeling the to earnings, colder mix. more price, of that and the about we we've as growth number really and Cemplank competitor would siding lot there into And what reaching it market way the products we marketing that the drove to to from proposition value think markets is quarter two-third the the shift brand repair market, then in about has where related Hardie well we invest the and indicated second the as highest the offer as the is and of price And our our at of owners, remodel really and that the Day Hardie products. home one, so num products we that really that the color superior a as and James story and that that of we particularly seen

Lisa Huynh

Jack. been to Thanks early And to the the that's is by uptake it transitioning panels guess Cemplank standard a of I – big sounds of large improvement still the that as the the understand? stands. from would of currently you proportion Hardie higher follow-up, like board driven value Yeah. than days rather It's a products, textured customer ASP it as a base

Jack Truong

correct. That's

market course some there. the a mix momentum goes what that time accelerate second innovation plank, too early a the so into there's Hardy as Cemplank transition to part Hardy as think So brand the in gain it's that then to about that's we penetrate is But Lisa expect of that color yet, of And to is bit segments. and color still technology. with overall but on, was continuing the results, with first And brand it, in lot the plus should products of exterior from product that the were Maybe way to led led products. then the quarter the to for to brand that then Hardy remodeling new of innovations. little the we due see market

Lisa Huynh

Thanks.

Operator

you. Thank

Sophie comes of from Your question Bank Please ahead. next go Spartalis from America.

Sophie Spartalis

Good morning.

of Just strategy will you sort to to guess do how producing strategy please. country? and a expect forward. regard top through walk it from plant more that just be just pulled and a products particular you the having to envisaging capacity Are down of going on brownfield greenfield level. manufacturing lot still particular the seems a you've It servicing of network integrated I the there, market a full Can you or service

Jack Truong

don't and three to also, greenfield should region, the region of bigger certainly for capacity patch region. from week one it Yeah, brownfield the product another move we

three, begin we really is And lot in we bigger the of business it growth to sides, now was we our that we plan is to that to growth years than as four the accelerate – So a for that rate expect any that ago. today that now our getting in to lot a really it focus what a of or more network really more products market so we our the factory do or type have are having certain about we better. serve certain call dedicated stage this a to integrated is plant into of or would

Sophie Spartalis

Okay.

region? So down for dedicated you're of going servicing plan different U.S. the the entire products route

Jack Truong

Correct.

I think dedicated of some the South recommission plant in we So we're our siding – haven't that producing in example. products, and plant announced your pretty for quarter Carolina much for that the example, last to will that earnings to brand be about

Sophie Spartalis

you you that mix value in up weaker of the Europe? some in are just your Thanks, provide higher terms clear. That's share geographical then the as just maybe team, to the color Jack. are volumes market sort U.S. where for traditionally going now and in of these seeing gaining initiatives, particularly product And Okay.

Jack Truong

recent COVID doing – really the the has with Because changed. behavior consumer environment, Yes.

the U.S., marketplace. more satisfy because of it. the people In Let enough needs homes have then couple to homes has the going their And price home remodel me walk not through want a of is new There's construction more you up. built certainly to in been examples. the we and

And stay then That's homeowners need and so put, home. heightened do there's been remodel for what awareness. a their to

we – that's can see activities. more remodeling lot of the a So so

of different we're look like fit new we And the deliver can more needs. with then we're different, or those value designs until remodel, high our where U.S. would want of exterior going of to can And shingles those Northeast their it's flat types lot living look. to lot can someone move the really across for to type in products Coast that's And and that someone right of wood if is if that because about homeowner's just a marker color, – homeowners And the West products, to behavior Europe, their satisfy more the we condo, the that's in – for you cedar and a and like needs. that look. more the in example, now And the those of than able so have now do then a have the in where have apartments, S. in Germany, example. for shape U there's so that folks Germany, re-remodel reach a many brand to to Hardie with

James deliver particularly people impact properties, to when and the gypsum is acoustics with can what more more so the happens, fire we like as the the use that very resistance, are products attenuation our as durable. flooring the on fiber from product compliant one code. And the well Hardie rating products in that see or It board would

having changing So portfolio into that play happening needs. a the strength now of it's consumer satisfy really these lot is products behaviors are our of those diverse really and can

Sophie Spartalis

great. Jack. Thanks, That's Okay.

Operator

Thank you.

Your next Go Jefferies. question comes from Simon ahead. Please. from Thackray

Simon Thackray

much. Good very morning, you morning, Jack. Thank Jason. Good

Jack Truong

morning. Hi, Good Simon.

Jason Miele

morning. Good

Simon Thackray

Good morning. morning. Good

Just little you wanting to convincing that commodity product? occurring. with cut North rise product observed much branded more, lift explore price just of in that in America was do was – the to rise also sort you significant you in that of how value shift a by commodity X% folks in understand to extent towards convince a a price helped was price What products that the mixed the shift saw particular of that or want board Cemplank, have that bit move board the

Jack Truong

better same to then consumers at the Hardie experience not is the the better brand same time the brand of brand Cemplank more value key through that for exterior value much different brand the more and various not different but with And many from is not with the deliver have and brand. have able of communicate want then time, Hardie And exterior we're have which of Hardie builders much also also fiber homeowners – and market product that better so only more warranty are that around colors our that of value to those that And can they really in to much to we that country deliver a service. total products brand move a Cemplank really really the have home the the we're we And is homeowners. direct would to have much products throughout Hardie owners at that and is to now to the the Simon, customers, the that designs combination the able home the – fact types homeowners. the brand Yes. the need, upgrade of Cemplank brand.

Simon Thackray

out So, so the shift really more that was value it in convince people did to value, than the proposition metrics? Cemplank on the pushing price that value proposition

Jack Truong

Yes.

brand. narrow took also very the price also at Cemplank is about on be products. can home of having the increase time different that brand to foremost and based And mean, sure the I broad the same first Cemplank gap. some – Hardie have designs really able First narrow really also we we portfolio on at owners to big that really time same a make

the combination push of is So it that really across.

Simon Thackray

sense. make that make That no. Yes,

showing X% your is and to the great great You and confidence said, strategy. prospect in with comments, X% now to to expectations X%, which traction X% were previously

for is to upgrade ambitions going the thoughts or your to for I’m influencing to question, business extent back of future also You what you increased mix that price [indiscernible] how your that meet accelerated CapEx capacity capacity interested your both of has – from demand? original and to CapEx ambitions and around sort

Jack Truong

re-remodeling strategy large – think of market what we the to things now geography in this we because, through in, Simon, that position homeowners of in demand our Investor and innovation course, demand really our bring the able the are how mean into can very market driving the and the products Well, of homeowners really that’s is couple up directly and driving company we our to mentioned brand, the market the benefits and Day, them now and exterior the demand is in indirectly customers. through and is of talk products that is homes that that creating our a about for the no operate of and then is that of no to show product I to And a high different we’re is home be and that to the value really owners really driving deliver.

and confidence able to more marketing then we growth, So in really success – be the a And place reinvest give to and a that that early as good continue in it profitable the drive that is that, have at growth. we is innovation to know be that plan right have us we some a we position really sure that position able to can our in we be to through have grow to to in make hard look at to very we capacity that level. to planning accelerate be and

Simon Thackray

of Europe, what not Zealand I there even helpful, numbers increasingly super That’s And any there, think quarter? limit do concerns, in back Is limiter, on talked or industry Jack. a you some background, the and but about you have them capacity about the within that there impressive for are year? in a guys, construction just has this see in sort that but talked been holding New builders speed against industry, bottlenecks this that’s volume home limiters and Australia any the Are mean, there We is constraints. sort the perhaps are very you in are of industry of, that can aspirations?

Jack Truong

really Simon we and the is directly set and because really footprint capacity at expansion capability homeowners to low-end make And and me opposed to little communicate add as value show a value and market that that marketing we of high look sell about as directly we we that stuff. now to the you homeowners. then our to products sure want and have that that want growth, to building market to the sell

stick is to important for strategy that, as our as growth growth of key – this as of driving to sake drive just opposed really just it’s make volume. volume for we we’re transition grab products, we would that So, those

Simon Thackray

the the is, Sure. what I industry seeing are But, constraints I saying think actually sorry, industry to get just able on you work, work bottlenecks, done? any physically was being any do

Jack Truong

and factor, faced strong of limiting the I that's is all lack pretty labor skilled really think Yes. still geographies. across trend of Certainly. been Certainly

Simon Thackray

Jason. Thanks it. Jack. Appreciate Thanks

Jack Truong

Thanks.

Operator

Thank you.

Your next from ahead. question Please. from Daniel Go CLSA. comes Kang

Daniel Kang

Hey Jack. Hey Jason.

Jack Truong

Hey Daniel.

Jason Miele

We welcome back.

Daniel Kang

that. do to Ready you. Thank

had similar a now with by XX% up sells strong record really amount I America, guess performance I question – Just North XX%. on only a the but either result,

seeing growth the reinvestment operating and not to initiatives? primarily that through. that we're Is So leverage come just due

Jack Truong

Daniel. correct, That's

two the company. a continue to have market very in very not for in you profit started to also about same the integrated line we at that much through high also our quarter. beginning the see you the marketing be backdrop as a we that, And will We big leverage come – key accelerate during And and input bottom the have and we really the comp that costs the of time inflation what this then regions. to saw to is in is quarter, year other growth as it campaign the on and of that driver that experienced

Daniel Kang

both it. impressive, in America ANZ. a very just North Got in price And then the performance mix in campaign early the very and

from for ANZ to as guidance which campaign? similar sense [indiscernible] X% towards level? to mentioned some X% we that North X% X%, Should to You a provide it's for makes X% us America expect it accelerates. Jason

Jack Truong

tell ANZ, the North too key early America have we in campaigns is yet consumer in driver that that marketing about the just to the of Daniel, we started, It because beginning year.

that seen. the in yet so momentum to in to Australia, we'll that U.S. here remained start it we So and in is get have be

Daniel Kang

that. I'll Jack. live Thanks very much, Right. with

Operator

you. Thank

Please from go Your Chau next comes from Keith Marquee. ahead. MST question

Keith Chau

Good evening, Jack and Jason.

outcome Just, the a on the North great my first division, period, question focusing obviously. America for

consider? if can there quarter whether from saw and U.S. for a tracking how think you'd quarter, steer you sub-straights in interiors outside's growth, first or were the particular took any what in share standout wondering the rate some completed we just second competitive you you normally regions exteriors Just date. give on the volumes are than to us higher any And with

Jack Truong

concentration for growth gains product or is the Keith, question, very, that's remodeling And a America, no that penetration. jobs. high first that the the of of and in also all think your, Well, strong the surprise very lot in area color North I area, we of the it's in area see that of first lowest type

this is along of it quarter, are past that our of that, we area. in an to So gain a area with, momentum during traditional course lot

Keith Chau

Jack, did U.S.? say you the Sorry, lower

Jack Truong

– the which Canada The Pacific Northwest. is lowest, Northeast, and the low in

Keith Chau

Okay. Great.

in And whether give where the you bit growth the at and on of – tracking it's back exteriors sorry, Can to-date. us period steer interiors just going on the a a moment?

Jack Truong

drive Well high on is value product mix. – really our focus really so

So and we we the now at look – mid total volume teens. around running we're

Keith Chau

Yes.

be the and so EBIT key – that of follow-up example of then context, if plant Fiber of in One to to business kind Okay, question being European management milestones you'd that the North a setting as that CapEx Europe? in see that key you've fiber to margin cement on plants for always potential just to cool. tracking American a you Europe, target fan look And the for to by, some on milestones formally team plant periods a are at been before before intentions the what and on want setting plant gone committing cement in Cement put division, a new targets. the fiber

Jack Truong

in right, and fiber of our that by put fiber to now. XX% that means of confidential business, What of I margin margin investment in is year, back range we to ambition the it mix will that Europe of have But having right internal in were out really right first terms cement to to the the coming EBIT do. – can exit the that kind to want right get that there'll are EBIT revenue this to for the certain €X in February, the that XXXX. amount the because milestone out it in share approach having is target of XX% allow at is XXXX Europe set – in that operating level, we key needed cement, now, to to keep really get accelerate end we that, that the be this to certainly have we we business for the billion at of that is we to total with

Keith Chau

I right. That’s Jack. much, very your appreciate time. Thanks

Jack Truong

Thank you.

Operator

you. Thank

Wilson Peter Credit from Your comes next ahead. go from Please question Suisse.

Peter Wilson

market been commentary specifically Would bit U.S. remodel commentary the mind morning. because giving weeks us a North market America Thanks, repair recent on from in in companies. there's you mixed commentary, and of

the demand starting that very still and Some is off. come is R&R to saying market that saying others strong

what in in interested R&R right saying just segment? now So that you're

Jack Truong

COVID, Good That the is I – quarter particularly are work asked think we morning, see lot Peter. a market so is still XX% we we want market and then R&R actually in is estimate U.S. of is that we someone mean what given still folks saw variant, the, past market strong. R&R – from growth the quite effects that of this to – what I particularly about, the home. Delta roughly also is

continue to to homes. the also there's of same been all demand to a enough built remodel so the And there. heightened there's not a home do satisfy the for their need at time, of out of And needs new homes

low still And here. interest so is the rates –

we we our on that continue lot forward. So to still, market to see going key point strong indicators of a a

Peter Wilson

there there deliver customer the sort Okay. do the above what some in then America on North context feed some the America? that the Can and speak you you year? growth how castles constrained the piece very can to, of in like dissatisfied on imagine, are into market customer customers. ground about capacity now of in your have of happy pretty and some this other year, to suppliers now how for pays rest that who, Good. allocation, of speak there's customers, Because it's expectations North I you And right but your expectation

Jack Truong

market – value our I to products high a more products create is can then better demand our with us to the to supply them our and is competition. to than to add our time, that more home we customers and we integrate return our that serve and allowed sales we it's throughout our owners, for and is make selling that role that the Well, same demand to by continue need customers insurance, bring the job so in for think means at the customers and key chain with money, our us. about as that first that competition we sales our customers customers our our And to value

So our values every to in to them, delivering so that customers the build that last Europe. continue add day And for but we those that key Pacific value and we're to two more we three – continue key to you stronger only with partnership ensure that strong our America, the our are four if all Not North customers. really results in – in really been also Asia across also see it's geographies to quarters.

Peter Wilson

Good.

Jack. there. it Thanks leave Okay. I'll Cheers.

Jack Truong

Cheers.

Operator

you. Thank

from RBC Quinn Capital Paul from go comes ahead. question Please next Your Markets.

Paul Quinn

much. Yes. Thanks very

Just up hear coming nicely. that questions, great is one, two Prattville easy to

Just us a is North that if volume the remind could you American plant on basis? to what addition

Jack Truong

Yes, nameplate nameplate capacity XXX are both basis, On Paul. a fee standard million lines capacity. those

Paul Quinn

Each.

Jack Truong

in sheet so Each. first Prattville machines fee, total Correct, for XXX standard is two those nameplate. million

Paul Quinn

market the indication, that of the what just penetration then if you one ColorPlus, for growth I ASP, is. us And on like give for Okay. mean, could seemed an areas

percentage a as branded is, ColorPlus what of products? already So

Jack Truong

degree But – the driver able see. segment forward. still is – it past company market it's typically – driving for able than of key really to is that us. expectation It be so our growth for going that Color, reach a the accelerate focus And that And really market be initiative a And homeowners a lower to story. because of and when relatively grown hasn't the big we're patient. use key grown hasn't to to the really value remodeling with is that growth years, mix for to now the the being the big during tell is opportunity consumer segment frankly us directly few is targeted that to we

Paul Quinn

Okay.

So then? where at to you help are now us track,

Jack Truong

think we disclosed that… don't I

Paul Quinn

In brown numbers…

Jack Truong

of disclose versus split the Hardie we ColorPlus Paul. Yes, certainly don't

Paul Quinn

Okay.

us is to basically there growth right? no So for the track way of ColorPlus,

Jack Truong

closed. worry Not Hardie just brand they value assume led include where the ColorPlus, the the market brand Hardie we innovations. all I Hardie how just with mix about exterior product brand But and exteriors, today. contractors then We with think high that

Paul Quinn

All right. Thanks.

Jack Truong

Paul. Thanks,

Operator

questions closing further now to back I'll this no Dr. at hand remarks. There for Truong Thank time. you. are

Jack Truong

Well.

another together before quarter Hardie continued indication of direct from XXXX, to execution we their the of would a like its for and global continue I thanks A end company as together colleagues remaining to our These call, just are phase we scale global global growth. results new fiscal execute our a this gratitude around the results all of to a and and the our the consistently. we are opportunity fiscal the company. deliver to continued So Thank truly leverage strategy morning. the in that first global result that its and to James year Hardie of financial you night company. I'm extend capabilities its on exceptional outstanding on of James profit next my take global excited and quarter and as XXXX have financial results beyond good year good first world, reach,

Operator

does That conclude participating, Thank may for you Thank for you now. conference you. today. our