James Hardie Industries Announces First Quarter Fiscal Year 2024 Results

James Hardie Industries plc, announced results for its first quarter ending 30 June 2023.

First Quarter Fiscal Year 2024 Highlights, Compared to First Quarter Fiscal Year 2023, as applicable

• Global Net Sales of US$954.3 million
• Record Global Adjusted EBITDA of US$279.1 Million, with an Adjusted EBITDA margin of 29.2%
• Record Global Adjusted EBIT of US$234.2 Million, with an Adjusted EBIT margin of 24.5%
• Adjusted Net Income of US$174.5 million, up 13%
• Adjusted Diluted EPS of US$0.39 per share, up 14%
• Operating Cash Flow increased 64% to US$252.3 million

Speaking to the results, James Hardie CEO Aaron Erter said, “Our team’s focus remains simple: working safely, partnering with our customers, managing decisively, and controlling what we can control. This focus has enabled us to start the year strong, delivering our best ever first quarter results for both Adjusted Net Income and Operating Cash Flow.”

Mr. Erter continued, “I believe our last two quarterly results are proof points that we are accelerating through this cycle. We have a superior value proposition with the right products and solutions that help our customers grow profitably. Our team is focused on maintaining our momentum to deliver strong financial results again in the second quarter as highlighted by our guidance range provided today. We are homeowner focused, customer and contractor driven, providing the entire value chain with world class products and services.”

First Quarter Segment Results

First Quarter Fiscal Year 2024 Results Compared to First Quarter Fiscal Year 2023 Results

North America Fiber Cement Segment

Net Sales declined 6% to US$694.8 million, on strong average net sales price (ASP) growth of +3%, more than offset by a decline in volumes of 9%. Volume of 747.8 million standard feet was ahead of May guidance of 680 million to 710 million standard feet. Stronger than expected volumes were due to profitable share gain and better than expected market conditions. The strong top line result, combined with significantly lower freight resulted in EBIT increasing 13% to a record US$217.6 million. EBIT margin expanded 540 basis points to a record 31.3%.

Asia Pacific Fiber Cement Segment

Net sales increased 5% to a record A$209.7 million. ASP growth of +12%, was partially offset by an 8% decline in volumes, primarily in our New Zealand business. The record top line result, combined with lower SG&A investments and relatively flat cost of goods sold per unit, led to EBIT increasing 35% to a record A$69.5 million. EBIT margin expanded by 750 basis points to 33.1%, also a record.

Europe Building Products Segment

Net Sales decreased 1% to €109.7 million. ASP growth of +23% was offset by a 18% decline in volumes, driven by the slowdown in the housing markets we participate in. EBIT of €10.8 million was down 5%, at an EBIT margin of 9.8%, which was a significant improvement sequentially.

Capital Resources

Operating cash flow increased 64% to US$252.3 million in the first quarter of fiscal year 2024, driven by strong results in all three regions and significant improvement in working capital. Working capital improved by US$51.8 million primarily due to lower inventory and higher accounts payable.

James Hardie Chief Financial Officer, Jason Miele, stated, “We continue to maintain a strong liquidity position, with our leverage ratio at 0.85x and US$580.7 million of liquidity. We improved our liquidity position by US$104.9 million since 31 March 2023, while also executing the next tranche of our share buyback program. We expect our continued robust operating cash flows will ensure we maintain this strong liquidity position. Our capital allocation framework remains unchanged and matches who we are, a growth company. The number one and primary focus of our capital allocation framework is to invest in organic growth.”

Commenting on capital expenditures, Mr. Miele stated “Our capacity expansion program is guided by our expectation for sustainable long term profitable share gain. In Q1 FY24, total capital expenditures were US$125.6 million. Despite the changing market conditions, we remain committed to investing in capacity expansion, but we will continuously adjust, such that we remain flexible and agile to respond as demand increases coming out of this cycle.”

Since the commencement of our share buyback program in November 2022, we have bought back 5.8 million shares for total consideration of US$127.4 million.

Sustainability

Speaking on ESG, Mr. Erter said, “We plan to release our fiscal year 2023 Sustainability Report on 10 August. Sustainability is a never-ending journey for us. We continue to identify and develop solutions that do right by our planet, our people and the communities where we operate. We have increased our ESG commitments, with even larger ambitions across the company while putting roadmaps in place to get us there and hold ourselves accountable. While this is just the beginning, we are all ready to do our part in building a better future for all.”

Outlook and Earnings Guidance

The outlook for the housing markets we participate in globally continues to remain uncertain. In our largest market, North America, the external data providers we utilize expect our addressable market to decrease between 5% and 18% in calendar year 2023 versus calendar year 2022.

Guidance for the second quarter of fiscal year 2024; we expect:

• Adjusted Net Income to be in the range of US$170 million to US$190 million
• North American volumes to be in the range of 740 million to 770 million standard feet
• North American EBIT margin to be in the range of 30% to 32%

For the full year FY24, we expect to spend a total of approximately US$550 million in capital expenditures.

James Hardie’s guidance is based on current estimates and assumptions and is subject to several known and unknown uncertainties and risks.

Further Information

Readers are referred to the Company’s Condensed Consolidated Financial Statements and Management’s Analysis of Results for the first quarter ended 30 June 2023 for additional information regarding the Company’s results, including information regarding income taxes, the asbestos liability and contingent liabilities.

For the full first quarter results, click here.

About James Hardie Industries

ames Hardie Industries plc is a limited liability company incorporated in Ireland with its registered office at 1st Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, D02 FD79, Ireland.

Contact:

James Brennan-Chong – Director of Investor Relations and Market Intelligence – media@jameshardie.com.au – (312) 756-9919

Source: James Hardie Industries plc