James Hardie Industries plc

Welcome to the James Hardy Fiscal Third Quarter 2025 Earnings Conference Call. After prepared remarks by management, there will be an opportunity to ask questions. Please limit yourself to one question and one follow-up. If you have additional questions, please rejoin the queue. I would now like to have the call over to Joe Olesmeyer, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and thank you to everyone for joining today's call. Please note that during the course of prepared remarks and Q&A, management may refer to non-GAAP financial measures and make forward-looking statements. You can refer to several cautionary notes on page 2 for more information. Also, unless otherwise indicated, our materials and comments refer to figures in U.S. dollars, and any comparisons made are to the corresponding period in the prior fiscal year. Now, please turn to page 3, where you'll find the agenda for today's call. I am joined by Aaron Erder, Chief Executive Officer of James Hardy, and Rachel Wilson, our Chief Financial Officer. Aaron will share key messages for the quarter and provide an update on the business before handing it over to Rachel, who will review our financial performance, detail our outlook and guidance, and speak to our cash generation and capital allocation framework. Then Aaron will return to conclude our prepared remarks before we move to Q&A. I am now pleased to hand the call over to our Chief Executive Officer, Mr. Aaron Erter.

Thanks, Joe. Before I begin, I would like to take the opportunity to thank all our employees around the world who work to safely deliver the highest quality products, solutions, and services to our customers. Just weeks ago, wildfires caused immense destruction absolute devastation throughout the Los Angeles area. As a leadership team, our first priority was to get in touch with our teammates in the region to ensure that all of them and their families were safe and accounted for. And we were relieved to learn that they were. Zero harm is at the forefront of everything we do in our plants and in our offices, at home and out in our communities. Within the span of just a few months, two groups of James Hardy employees have been dealt unimaginably dangerous circumstances, and I am inspired by the resilience our team showed in handling these hardships and proud of how our entire organization has mobilized to support our affected colleagues in their times of need. Our purpose as a company, building a better future for all, clearly guides our actions in the wake of such events. From contributing to organizations safeguarding our communities and responding in the aftermath, to being a critical partner in the rebuilding efforts. Now, let's begin on slide four. We delivered strong business and financial results in the third quarter. And our year to date performance shows that we have a strong handle on our business as we continue to scale the organization and invest to grow profitably. We are executing on our growth strategy, and we are confident that our actions are driving outperformance in our markets and positioning us well to sustain this outperformance. We are winning by partnering with our customers, contractors, and homeowners, and this success propels our organization forward and fuels my optimism around the future of James Hardy. We have the strongest team in the industry and the right strategy to go after our material conversion opportunity. Despite a challenging demand environment and intensifying raw material headwinds, our North American business results clearly demonstrate the inherent strength of our unique value proposition and the underlying momentum in our strategy. Our sales year-to-date were well over $2 billion, which represent a double-digit CAGR over the last five years, in line with our long-term top-line growth target. Over that time frame, our adjusted EBITDA margin has risen more than 400 basis points to approximately 35%, and we continue to see an additional 500 basis points of margin opportunity in the years ahead. As expected, business conditions have remained challenging, and high interest rates continue to present a barrier to the homeowner. But we remain confident that as affordability conditions improve, demand will meaningfully recover in both our new construction and repair and remodel end markets. We continue to strengthen our competitive position through the current environment, and we are deepening existing partnerships forging new ones. We are the best position in the industry to continue providing the highest levels of service and deliver value for our customers. This quarter, we continue to build on our track record of consistent delivery of results, and we are solidly on track to deliver on our guidance. In North America, we ship 744 million standard feet of volume, consistent with our expectations and commentary. And we achieved a 29.1% EBIT margin, evidence of our ability to deliver savings through our hardy operating system initiatives and focused clutch actions. This has allowed us to sustain our peer leading profitability, even as we continue to invest in future growth. And on a consolidated basis, we delivered $154 million of total adjusted net income with solid performance across our regions. Please turn to slide five. In North America, we are outperforming our end markets through our superior value proposition and driving leading margins despite intensifying raw material headwinds. We are uniquely positioned to address our immense material conversion opportunity. and are aligning our capacity to fully service higher levels of demand in the recovery. We are investing across the value chain, growing our contractor base, and accelerating homeowner demand to capture the repair and remodeling opportunity as affordability pressures moderate and demand recovers. Our strategies are driving wins with homebuilders as we deepen our exclusivity arrangements work to increase trim attachment rates, and highlight how our production network creates a competitive advantage that supports their growth plans. In Australia and New Zealand, our strategy remains consistent and focused. We are growing our strong category share across our end markets, doing so through new customer acquisitions and project conversion enabled by deep customer integration. We are driving market share growth where we have the right to win by influencing the way homeowners build through co-creation and by utilizing the strong James Hardy brand. We are leveraging innovation to accelerate material conversion against brick and masonry, and we are optimizing our network for future growth. And finally, we are strengthening our scaled manufacturing operations to drive further efficiencies through our Haas initiatives, which will help to sustain our robust profitability profile. And in Europe, our markets remain challenged, and our expectation for a more gradual path to recovery for Germany remains unchanged. However, we continue to focus on our core strategy of driving double-digit growth in high-value products, which we achieved in both the quarter and year-to-date. We have a solid plan to improve our margins in Europe, comprised of purposeful investment to drive operating leverage alongside sales growth and to generate cost savings by optimizing our production footprint and driving efficiencies. Now, please turn to slide six as I take a moment to review our overall strategy. We are grounded in our unwavering commitment to being homeowner focused customer and contractor driven. This is a holistic approach by our teams across the entire value chain. Importantly, we're doing it the right way and not sacrificing on our foundational imperatives. Putting safety at the center of everything we do through zero harm. Focusing on building a competitive advantage through our sustainability initiatives. Driving continuous productivity savings with the hearty operating system and, importantly, leveraging the individual contributions and collective power of our people as we invest in our team members and scale our organizational capabilities. Please turn to slide seven, where you'll find our value creation flywheel, a visual demonstration of the power of our value proposition, starting with demand creation. We are the brand of choice for homeowners, customers, and contractors, and we achieve this through targeted marketing at each step in our value chain. This includes traditional media to build consumer awareness, collaborations with influencers to further our mindshare with consumers, and leveraging technology to provide homeowners with visualization tools before they purchase. We further build brand awareness through sports advertising, knowing that this is an important channel to reach not only the homeowner, but also the contractor. Recently, we made targeted investments across college football playoff games and saw traffic to our website more than double during the games in which we advertise. And traffic correlates to leads. This is an outstanding result. and a prime example of our test and learn approach to tracking the efficiency of our investments. Turning to innovative solutions. From a product standpoint, our global R&D function plays a vital role, developing new and innovative designs and aesthetics for homeowners to choose. We are simultaneously strengthening our core offerings to continue to capture the material conversion opportunity and improving the efficiency of installation. ColorPlus within our portfolio of innovative and visually appealing products and solutions will play an important role in accelerating material conversion across our end markets. This product line has continued to succeed within R&R, but home builders appreciate both the labor savings and homeowner value proposition attributes of the product as well. Even in a year with demand challenges across new construction and repair and remodel, our single family ColorPlus volumes are up double digits in both the quarter and on a year-to-date basis. Our innovative solutions and superior product value proposition continue to separate us from the competition, driving incremental growth with home builders with national reach. For example, last week we announced a national multi-year exclusive hard siding and trim agreement with MI Homes, one of the largest home builders in the United States. This solidifies a decade-long relationship, making hardy siding and trim products a standard feature on every new MI Homes residence where hard siding is installed. In discussing the reasons for choosing to deepen their ties with us, MI Homes highlighted the superior product aspects that resonate with home buyers. Enhanced protection, superior durability, gorgeous aesthetics, and low maintenance solutions. Our products also continue to rapidly displace vinyl within repair and remodel, leading more and more contractors of significant scale to turn the James Hardy fiber cement as the engine for growth in their business. Take Thompson Creek as an example. Thompson Creek is a major exteriors contractor across six states from North Carolina up through the mid-Atlantic all the way to New Jersey, offering siding, windows, doors, and roofing. Thompson Creek recently announced that they will now offer James Hardy Fiber Cement to significantly expand their business and grow their shares. The catalyst for this decision? Simple. Homeowners were asking for it. Further proof that our strategy of engaging with all stakeholders to pull our product through the channel will continue to drive outperformance. Thompson Creek kicked off our new partnership by selling 30 exterior remodels with James Hardy in the first 30 days. Thanks to a powerful, collaborative marketing effort, focused on highlighting our superior product value proposition through core James Hardy messaging, such as Imagine the Possibilities. I encourage you to check out Thompson Creek's website, as it exhibits exactly the type of mutually beneficial partnership that comes from our focus on the homeowner and our drive to grow with the contractor. Next, I'll touch on how we provide best-in-class business support to enable the growth of our customers, contractors, and home builders. Starting with our Contractor Loyalty Program, or as you'll increasingly hear me refer to it as, the Alliance. This represents everything the program has been in the past and everything it will evolve to be over time. The program takes many different forms depending on what the contractor needs and wants. and how forming an alliance with James Hardy can help them achieve their growth goals. Last quarter, I touched on the suite of benefits that our contractors can expect when they join the program, including qualified homeowner leads, training, networking opportunities to enable the sharing of best practices, and recognition and rewards that foster loyalty to James Hardy. But we're often asked how we balance. using this program to continually reach new contractors and convert them from vinyl, while also ensuring that our most elite preferred contractors of major scale derive ongoing value from our partnership with them. Needless to say, the larger and more aligned the contractor, the more it depends on their business needs, but what is consistent from one relationship to the next is we simply drive value and we drive growth. In our new construction and market, particularly with our national home builder partners, our scale represents a key competitive advantage as our localized production footprint aligns with their path of growth. We highlighted this when we announced earlier this year that Meritage Homes, the fifth largest builder in the country, elected to deepen their strong relationship with James Hardy by signing a national hard siding and trim exclusive agreement. We also shared earlier this year that we were recognized as a national preferred partner by David Weekly Homes, representing our 17th award in 20 years. And now, our unwavering commitment to this partnership has earned us the privilege of serving David Weekly Homes with an exclusive agreement across our full wrap product range extending into the next decade. Our strategy is clearly working and we have a strong track record of material conversion against vinyl and wood. We have demonstrated that together this leads to long-term profitable growth. Put simply, our strategy enables us to capture our material conversion opportunity and Our material conversion opportunity, in turn, drives the continued success of our strategy. Now, I would like to hand it over to Rachel to share more details about our third quarter results. Rachel?