Continued Growth Above Market and Strong
Returns
Q2 FY21 North America Guidance: Exteriors
Volume of +7% to +11% and EBIT Margin of 27% to 29%
Full-Year FY21 Guidance: Adjusted NOPAT
between US$330 million and US$390 million
First Quarter Highlights:
- Group Adjusted net operating profit ("NOPAT") of US$89.3
million, in-line with the prior corresponding period (“pcp”);
- Group Adjusted EBIT of US$124.9 million, flat to the pcp;
- North America Fiber Cement Segment exteriors volume +1% versus
pcp;
- North America Fiber Cement Segment Adjusted EBIT margin of
29.0%, an increase of 390 basis points versus pcp;
- Asia Pacific Fiber Cement Segment Adjusted EBIT margin of
24.4%, an increase of 140 basis points versus pcp; and,
- Operating cash flow of US$189.2 million, an increase of 35%
versus pcp.
CEO Commentary
James Hardie CEO, Dr. Jack Truong, said, “In February 2019, we
launched a global strategy to transform James Hardie from a big,
small company to a small, big company that is capable of delivering
growth above market with strong returns, consistently. This is now
our fifth consecutive quarter of delivering strong results in-line
with the core goal of that strategy: growth above market and strong
returns. I am very pleased to note that not only do we remain
on-track with our transformation, but we are also accelerating our
transformation during the pandemic.
During the first quarter we strengthened our liquidity and
financial flexibility, delivering US$189.2 million of operating
cash flow, an increase of 35% versus the prior corresponding
period. This outstanding cash performance was driven by our strong,
profitable sales and significant improvement in our working
capital. We increased our liquidity to US$693.1 million and lowered
our leverage ratio to 1.65x. We expect to continue to improve
liquidity and leverage with the robust execution of our strategic
plan during the pandemic.”
He continued, “The North America segment delivered another
outstanding result. We continued to grow above market while
delivering exceptional returns: 15% increase in Adjusted EBIT and
29.0% Adjusted EBIT margin. Our manufacturing team continued to
execute our LEAN strategy well, delivering on expected cost
savings. All of our plants are operating safely and continuously to
serve our customers, with the products they want when they need
them, through the pandemic. As a result, our commercial
transformation accelerated, and we gained significant market share
during the first quarter. With this positive momentum, we expect
exteriors volume growth of between +7% and +11% and an Adjusted
EBIT margin between 27% and 29% for our North America segment in Q2
fiscal year 2021.
In the first quarter, our Asia Pacific segment delivered robust
financial returns with an Adjusted EBIT margin of 24.4%, despite
the impact of government-imposed shutdowns of two of its three core
markets, New Zealand and the Philippines. The Australian business
delivered strong results, with +1% volume growth and Adjusted EBIT
margin comparable to our North America segment.”
He added, “We started fiscal year 2021 with positive momentum,
our fifth consecutive quarter of delivering strong results. Our
global team remains focused on executing our strategic plan to
deliver growth above market and strong returns. I would like to
thank all our employees around the world for their dedication and
commitment to delivering another outstanding quarter, while
continuing to be vigilant in being safe at work and at home.”
Dr. Truong concluded, “While the COVID-19 pandemic has caused
disruptions to markets that we participate in and creates
uncertainty regarding economies and housing markets in the future,
I am confident in our global team’s ability to execute to
accelerate our strategy through the crisis. We expect fiscal year
2021 Adjusted NOPAT to be between US$330 million and US$390
million.”
Outlook and Earnings
Guidance
James Hardie continues to assess the impacts and the
uncertainties of the COVID-19 pandemic on the geographic locations
in which we operate, as well as its impact on the new construction
and repair and remodel building markets. The COVID-19 pandemic
remains highly volatile and continues to evolve, and the full
impact of the pandemic on James Hardie’s business and future
financial performance remains uncertain.
James Hardie’s guidance is based on current estimates and
assumptions and is subject to several known and unknown
uncertainties and risks, including those related to the COVID-19
pandemic and set forth below in “Forward-Looking Statements.”
Management expects full-year Adjusted net operating profit to be
between US$330 million and US$390 million.
The comparable Adjusted net operating profit for fiscal year
2020 was US$352.8 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.
For the second quarter fiscal year 2021, we expect exteriors
volume growth of between +7% and +11% and an Adjusted EBIT margin
between 27% and 29% for the North America segment.
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 2020 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 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 2020.
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 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
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 2020.
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 2020; changes in general economic,
political, governmental and business conditions globally and in the
countries in which James Hardie does business; changes in interest
rates; changes in inflation rates; changes in exchange rates; the
level of construction generally; changes in cement demand and
prices; changes in raw material and energy prices; changes in
business strategy and various other factors. Should one or more of
these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those described herein. James Hardie assumes no obligation to
update or correct the information contained in this Media Release
except as required by law.
This media release has been authorized by the James Hardie Board
of Directors.
END
James Hardie Industries plc is a limited liability company
incorporated in Ireland with its registered office at Europa House,
2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, D02 WR20,
Ireland
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version on businesswire.com: https://www.businesswire.com/news/home/20200810005809/en/
Media/Analyst Enquiries: Anna Collins Telephone:
+61 2 8845 3356 Email: media@jameshardie.com.au
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