Business Description:
James Hardie Industries SE (JHX) is an international building materials company focused on fibre cement products. JHX is the dominant manufacturer of fibre cement in the US, Australia, New Zealand and the Philippines. Products include fibre cement exterior siding and trims, interior flooring and backing board and pipes. JHX has begun marketing fibre cement products in Europe.

Strategy Analysis:
JHX is focused on aggressively growing primary demand for products in the targeted market segments; growing overall market position while defending existing market segments; offering superior comparative value to that of competitors; and continually introducing differentiated products to improve product mix and increase margins. The company aims to maintain its competitive advantage through continual investment in research and development and the introduction of higher priced and higher margin differentiated products. A zero landfill target to limit waste in the production process assists overall margin management. Excess free cash flow is returned to shareholders. James Hardie Industries SE reported NPAT of US$128.4m for the half-year ended 30 September 2011. Net operating profit excluding asbestos, ASIC expenses and tax adjustments increased 32% to US$80.6m from US$61.2m. Revenues from ordinary activities were US$645.2m, up 6% from the same period last year. Diluted EPS was 29.2 US cents compared to (73.3) US cents last year. Net operating cash flow was US$37.1m compared to US$7.8m last year. The interim dividend declared was 4.0 US cents compared with nil last year. Looking ahead, management confirmed previously indicated full year earnings excluding asbestos, ASIC expenses and tax adjustments to be within the range of US$126m to US$140m, assuming, among other things, housing industry conditions in the group's major markets remain relatively stable and a US$/A$ exchange rate near current levels applies for the balance of the year ending 31 March 2012.