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

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Daniel Kang: Good morning, everyone. I’m just interested in your comment on driving a higher net sales price. If I look at slide 23 of your packet looks like net sales price slipped in 3Q for North America and flatten in APAC. Just trying to reconcile how you expect to grow net sales price given the relaunch of Cemplank, and I guess a tougher market where arguably you’d have to grant rebates.

Jason Miele : Yes. Daniel. Thanks for the question, Daniel. Yes, Q3 versus Q2, our last price increase was in July. We achieved that in the second quarter. So we got a price increase on January 1 that we’ve put through, as Aaron talked about on the call, 65% of what we do is R&R, not price insensitive, I should say. And so we’ll achieve that in the R&R segment, and then you shift to smaller portion of our business, the 35%. And Aaron went through all the things you just talked about, relaunching Cemplank on a limited basis, et cetera. So there’ll be some mix factors there. It’s also the expectation that new construction decreases more significantly than R&R, so you should get a mix benefit from that. So there’s a lot of moving pieces this quarter or sorry, moving into next year, net-net, we think you take all those things together with the price increase, we’re going to drive a higher net price moving forward.

Aaron Erter: Yes. And hey, Daniel, I’ll just add to what Jason said. We intend to do this. This is all after discounting as well.

Daniel Kang: Got it. Okay. And I guess one of the key highlights remains that ColorPlus volume continues to perform very well. It has slipped a little bit, but what’s your outlook going forward for that sort of range for ColorPlus volume?

Aaron Erter: Yes. Look, Daniel, it’s a great question. I mean I think the performance has been just outstanding. Right. As you look at, I think it’s over the last six quarters, we’ve grown this about 30%, and most recently, we grew at 18%. And you have to remember, this is a big focus area for us when we think about our marketing efforts and where we’re targeting really very good R&R markets like the Midwest and the Mid-Atlantic and the Northeast out there. We expect to continue to grow this at double digit rates out there and above the market. So it is a high focus, and we expect to continue to deliver those types of results.

Operator: Your next question comes from David Pace with Greencape Capital.

David Pace: Hi, guys. I know it’s early days, but some of the calls have done with some homebuilders of late have spoken about a response to a lowering of the 30-year mortgage rate, just in terms of foot traffic, reduction in cancellation rates, slight improvement in sales. Again, I guess referring back to the earlier question regarding the lag between activity at the housing level and you guys actually selling board? Can you make reference to first of all, are you getting any of those sorts of signals from the home building companies? And secondly, redress that lag question for us.

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