James Hardie Industries plc (NYSE:JHX) Q3 2023 Earnings Call Transcript

Page 2 of 10

Aaron Erter: Yes, Andrew, thanks for the question. Look, we talked about before bringing solutions to our customers, understanding their needs. So obviously, particularly if we look at our big builders, they’re becoming more and more price conscious. It’s becoming more competitive out there. So Cemplank is an asset that we have in our arsenal that we brought back, but on this call, I’d rather not go into the specifics for commercial sensitive reasons. But as I mentioned before and Jason that I’m really confident we’re going to drive a higher net sales price as we move forward. And again, we’re going to continue to partner with our new construction building partners to ensure they have the right solutions that allows them and us to be successful together.

Andrew Scott: Okay, thank you. And Jason, just interested in the cost environment, obviously, we’ve seen transport come away your expectations, and when we might see some bottom line improvement, whether it’s just cycling the cost comps from a year ago, or where you’re seeing some of those leading indicators pointing to some relief.

Jason Miele : Andrew, we continue to see inflation be pretty stubborn into Q3. But we would expect as we move into Q4 and onward, to deliver a lower landed cost as we shift production to more efficient lines as Aaron discussed. And we have seen some improvement in freight that we’re currently not seeing while inflation is stubborn, and prices are high. We have seen them; the other basket of goods starts to flatten. So yes, we expect to start to not seen landed costs impacted as much as it has been the first three quarters of this year.

Aaron Erter: Yes, Andrew, I’ll just add on to that. Jason mentioned, the high level of inflation that we saw this year unexpected almost three times the amount, but as we move forward, it’s our responsibility to offset those. So whether that be price/mix, combination of both of those and our HMOS, we’re going to work hard to make sure we’re offsetting any type of inflation that comes across us.

Operator: Your next question comes from Lisa Huynh with JPMorgan.

Lisa Huynh: Oh, hi, morning, guys. In the context of North American volumes paying off 10% in the third quarter, can you give us an indication of how sharply R&R was off, relative to new construction?

Aaron Erter: Yes. Hey, Lisa, thanks for the question here. If we look at our expectations for North America, R&R remained a little stronger than single family new construction. But we did see that dive into negative territory for us over the last quarter.

Jason Miele : Yes, Lisa, then, on the call, Aaron referenced a basket of providers we use to measure the different markets. And that same group is signaling R&R in calendar year €˜23, to be down 6% to 7%. And then obviously our fourth quarter would be a part of that year. So while we thought, last quarter, we were signaling kind of flattish R&R activity is certainly our second half down in the low single digits.

Lisa Huynh: Okay, sure. And then I guess in the context of that you did highlight as well, the competitive market environment out there, can you just make a comment about market share how you’re seeing competition in the scheme of things?

Page 2 of 10