James Hardie Industries Announces Third Quarter Fiscal Year 2024 Results

Record Adjusted Net Income of US$179.9 Million

Record Nine Months Operating Cash Flow of US$749.5 Million

Q4 Adjusted Net Income Guidance of US$165 Million to US$185 Million

James Hardie Industries plc, announced results for its third quarter ending 31 December 2023.

Third Quarter Fiscal Year 2024 Highlights

Compared to Third Quarter Fiscal Year 2023, as applicable:

• Global Net Sales of US$978.3 Million
• Global Adjusted EBITDA of US$280.4 Million, with an Adjusted EBITDA margin of 28.7%
• Global Adjusted EBIT of US$234.1 Million, with an Adjusted EBIT margin of 23.9%
• Record Adjusted Net Income of US$179.9 Million, up 39%
• Adjusted Diluted EPS of US$0.41 per share, up 41%
• Record Nine Months Operating Cash Flow of US$749.5 Million, up 73%

Speaking to the results, James Hardie CEO Aaron Erter said, “Our team’s focus remains simple: working safely, partnering with our customers, investing in long-term growth and driving profitable share gain. This focus has enabled us to deliver a strong nine months, and a record quarterly result for Adjusted Net Income.”

Mr. Erter continued, “Our last four quarterly results have demonstrated that we are accelerating through this cycle and taking share. We have a superior value proposition that helps our customers grow and be successful. Our team is focused on maintaining this momentum and consistency to deliver strong financial results again in the fourth quarter. We are homeowner focused, customer and contractor driven, providing the entire value chain with world-class products and services.”

Third Quarter Segment Results

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

North America Fiber Cement Segment

Net Sales increased 13% to US$727.0 million. Average Net Sales Price (ASP) growth of +3% was supported by a 9% increase in volumes. Volume of 767 million standard feet exceeded the top end of November guidance of 730 million to 760 million standard feet. EBIT increased 37% to a record US$237.8 million, supported by a higher average net sales price and lower freight and pulp costs. SG&A investments increased 40% or US$21.5 million. This increase is primarily attributable to Homeowner and Trade marketing initiatives combined with significantly reduced levels of activity in the same period of the prior year. Sequentially, SG&A investment was up 1% versus the second quarter of fiscal year 2024. EBIT margin improved 570 basis points to a record 32.7%.

Asia Pacific Fiber Cement Segment

Net Sales increased 21% to A$206.3 million supported by ASP growth of +14% and a 6% increase in volumes, with New Zealand volumes performing the strongest. EBIT increased 34% to A$56.7 million, supported by a higher average net sales price, partially offset by higher cost of goods sold per unit due to product mix. EBIT margin improved 280 basis points to 27.5%.

Europe Building Products Segment

Net Sales increased 8% primarily related to a 18% increase in ASP and a €4.2 million favorable true-up related to customer rebate estimates. The growth in ASP resulted from our strategic price increases and growth in High Value Products. Volumes declined 10%, driven by reduced market activity in Fiber Gypsum. EBIT of €7.1 million increased 373%, supported by a higher ASP, which offset increases in cost of goods sold per unit, as well as increased investment in SG&A to drive growth initiatives. EBIT margin improved 500 basis points to 6.5%.

Capital Resources

Operating cash flow increased 73% to a record US$749.5 million for the nine-month period of fiscal year 2024. Nine-month operating cash flow was driven by strong results in all three regions and significant improvement in working capital of US$121.2 million.

James Hardie Chief Financial Officer, Rachel Wilson, stated, “Our Q3 leverage ratio of 0.65x and over US$1 billion of liquidity reflects our strong margins and cash generation. During Q3, we improved our liquidity position by US$419 million, this included proceeds from the US$300 million term loan that was executed in October 2023 and the impact of buying back 2.4 million shares at an average price of US$32.11, for total consideration of approximately US$75 million. We plan to continue to repurchase shares under our US$250 million buyback program.

Our capital allocation framework is unchanged. The primary focus of our capital allocation framework is to invest in organic growth.”

Commenting on capital resources, Ms. Wilson stated “Our capacity expansion program is guided by our expectation for sustainable long-term profitable share gain. For the nine-month period of FY24, total capital expenditures were US$328.2 million. We remain committed to appropriately investing in capacity expansion such that we remain flexible and agile to respond as demand increases coming out of this cycle.”

Sustainability

Speaking on ESG, Mr. Erter said, “Today, we have highlighted in our presentation materials the benefits of our localized manufacturing footprint in North America. The strategic placement of our network of plants not only optimizes the movement of our products, but also lowers our costs and our carbon footprint. It enables us to be more responsive to regional shifts in demand, while simultaneously allowing us to offer a high degree of customer choices. 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 are all ready to do our part in building a better future for all.”

For more, see our 2023 Sustainability Report.

For full results click here.

About James Hardie

James 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