James Hardie Industries plc - ADR

Strong Q1 performance; fiber cement leads and beats guidance - Net sales: $1.47B, +64% reported / +12% pro forma, above the high end of original guidance. - Adjusted EBITDA: $422M with margin 28.6%, above the high end of guidance (benefits from volume leverage and cost actions). - Key driver: North America fiber cement organic growth of +20%, ahead of expectations. - Management cites: (1) execution of growth initiatives (ColorPlus, Statement Essentials/Statement program, Trim-Over), (2) strength in more resilient channels (repair & remodel, multifamily), and (3) lapped a destock/inventory comp from last year. - Sell-through improving through the quarter (fiber cement sell-through accelerated each month; June strongest at +19%).

Deck/rail fundamentals improving, but Q1 comparisons influenced by inventory normalizing - “Deck, Rail & Accessories” (DR&A) net sales: $305.1M, -5% YoY. - Management emphasizes this is planned inventory normalization (not underlying demand deterioration). - Encouraging sign: sell-through improved sequentially each month; exited Q1 with healthy channel inventory and days on hand. - Guidance commentary implies some quarter-to-quarter volatility due to distributor transitions and sell-in vs. sell-through timing.

Management raised full-year outlook; Q2 expected growth with continued margin strength - Q2 net sales guidance: $1.485B–$1.575B (+14.9% to +21.9%). - Q2 adjusted EBITDA: $420M–$455M. - Full-year fiscal 2027 outlook raised: - Net sales: $5.564B–$5.723B (+5.9% to +9% pro forma). - Adjusted EBITDA: $1.536B–$1.625B. - Free cash flow: now expected > $500M for the year. - Capex: ~6%–7% of net sales.