James Hardie upbeat on growth

The group has made significant pro­gress in its strategic objectives through 2020.

James Hardie Chairman, Michael Hammes

James Hardie chairman Michael Hammes says he believes the construction materials company entered the COVID-19 pandemic in a strong position and will emerge from the health and economic crisis in even better shape as it drives profit growth that will outstrip the broader market.

Speaking to shareholders at the company’s annual general meeting, which was held in Ireland (due to travel restrictions the chairman was unable to attend in person), Mr Hammes also said the group had made significant pro­gress in its strategic objectives through 2020. He added that for the 2021 financial year the company would contribute about $US153.3m ($211m) to the Asbestos Injuries Compensation Fund.

However, despite the upbeat commentary on the year just completed and the year ahead, shareholders were not swayed by a resolution put by the board to alter some aspects of the company’s articles of association — including holding its AGM in Ireland, holding virtual AGMs and communications with shareholders — with the resolution attracting a 21.97 per cent vote against. The resolution still passed.

Mr Hammes said in his chairman’s address the COVID-19 crisis had brought extraordinary challenges but the company was prepared to face them from a position of strength.

“James Hardie was well prepared and positioned when we entered this unprecedented crisis and we are confident we will emerge even stronger,” he said.

“During this time of global stress and uncertainty, management strength and experience is critical.”

Mr Hammes said the leadership of chief executive Jack Truong was crucial in this.

“In Jack and his executive leadership team, we have strong and capable leadership, along with a deep understanding of James Hardie, our customers and the markets in which we operate,” he said.

Mr Hammes said since the crisis began, the board and executive leadership team had been focused on relentlessly reviewing and evaluating the challenges and opportunities ahead.

“Our business continuity plan is critical as we know that our ability to continue to operate our manufacturing facilities in a safe and compliant way is an important part of how we as a company are able to serve our customers and subsequently support the overall wellbeing of our employees and key stakeholders,” he said.

Mr Hammes said the company remained committed to maintaining a strong and flexible balance sheet, which was proving to be an important component of the business coping with the threats and challenges of the pandemic. “Our continued strong profitable sales performance, along with our quick and decisive capital management and working capital actions, helped increase our liquidity position to $US693m as of June 30, 2020,” he said.

“While it’s very difficult to forecast the full global impact and duration of this unprecedented pandemic, the significant progress Jack and his team have made on the company’s transformation to become an even stronger, truly global business has ensured that we entered this crisis well positioned.

“Jack and his leadership team have the board’s full support to successfully navigate James Hardie through this unprecedented time and we are confident that we will emerge even stronger.”

Looking back on fiscal 2020, Mr Hammes said the company began the year by continuing its transformation to drive James Hardie’s next phase of sustainable and profitable growth.

He said a projected payment of $US153.3m to the AICF during fiscal year 2021 represented 35 per cent of the company’s free cashflow for fiscal year 2020.

Including this contribution, James Hardie will have provided about $1.6bn towards asbestos disease related compensation since the AICF was established in February 2007.