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James Hardie(JHX) - 2025 Q2 - Earnings Call Transcript
JHXJames Hardie(JHX)2024-11-15 20:03

Financial Data and Key Metrics Changes - Total net sales were 4% below last year's record second quarter, at just under 1billionglobally[30]−AdjustedEBITDAforthequarterwas1 billion globally [30] - Adjusted EBITDA for the quarter was 263 million, with an adjusted EBITDA margin of 27.4% [31] - Adjusted net income in the quarter was 157million,modestlyaheadofexpectations[31]−Year−to−date,operatingcashflowgeneratedwas157 million, modestly ahead of expectations [31] - Year-to-date, operating cash flow generated was 364 million, with 225millioninvestedincapitalexpenditures[46]BusinessLineDataandKeyMetricsChanges−NorthAmericanetsalesdeclined5225 million invested in capital expenditures [46] Business Line Data and Key Metrics Changes - North America net sales declined 5% in the quarter, primarily driven by a 7% decline in volume [35] - Asia-Pacific net sales rose 1% in US dollars, but decreased 2% in Australian dollars, primarily due to a 10% decrease in volumes [39] - Europe net sales were roughly even with the prior year, but decreased 1% in euros [43] Market Data and Key Metrics Changes - North America shipped 717 million standard feet in the quarter, near the midpoint of guidance [35] - Asia-Pacific saw low single-digit volume growth and mid-single-digit sales growth in Australia and New Zealand [40] - European markets remain challenged, particularly in Germany, with a gradual improvement anticipated [16] Company Strategy and Development Direction - The company is focused on investing across the value chain to capture repair and remodeling opportunities as affordability pressures moderate [14] - A commitment to zero harm and sustainability is emphasized as foundational to the company's operations [20][21] - The long-term aspiration includes growing North America revenues by double-digits and expanding EBITDA margins by 500 basis points [59] Management's Comments on Operating Environment and Future Outlook - Management expects demand to meaningfully recover in both new construction and repair and remodel end markets as affordability conditions improve [11] - The company is planning for recovery and growth in both repair and remodel and new construction [57] - Management remains confident in the ability to expand product reach and capitalize on market growth opportunities [58] Other Important Information - The company repurchased 75 million of stock during the quarter, completing a 300millionrepurchaseprogram[31][49]−CapitalexpendituresforFY′25arenowanticipatedtobebetween300 million repurchase program [31][49] - Capital expenditures for FY '25 are now anticipated to be between 420 million and 440million,downfromapreviousrangeof440 million, down from a previous range of 500 million to $550 million [48] Q&A Session Summary Question: Planning assumptions for FY '26 regarding price increases - Management is still working with customers on price increases and targets a mid-single-digit increase annually [64] Question: Cost assumptions and SG&A expectations - SG&A control has been good, and management will adjust spending as necessary while maintaining long-term investments [66] Question: HOS savings contribution to performance - HOS discipline has contributed positively to EBITDA margin despite raw material challenges [72] Question: Volume expectations for North America - Management expects December quarter volumes to be above September quarter, driven by customer buying in anticipation of growth [86] Question: Impact of the Philippines exit on Asia-Pacific - Year-over-year APAC volumes are expected to be down about 30% in the second half due to the exit from the Philippines [93] Question: Price realization and market performance - ASP is expected to trend up for the full year, with management confident in outperforming market trends [95][96]