JHX - Looks to Achieve Organic Growth in Difficult Market; Rare Among Group

研报英文原文证据摘录

JHX - Looks to Achieve Organic Growth in Difficult Market; Rare Among Group

Truist Securities

to be impacted as inventory normalizes, but this is not expected to impact the full year performance. Note management still expects

sell-through to remain positive in the quarter.

Cost Synergies Finish Year Well Ahead While Revenue Synergies Remain On Track. Management shared that FY2026 saw cost

synergies come well ahead of their goal which provides confidence for achieving their $125 million cost synergy target ahead of schedule.

The company is still expecting to exit FY27 with $125 million in run-rate revenue synergies. Note this year should see revenue synergies

ramp meaningfully as the two sales forces have now been combined.

Inflation Impact of $80-$100 Million; Decking Pricing a Question. This inflation comes from a variety of inputs and freight with 65%

of the impact seen in the US. The company expects to mitigate these partially with pricing, although a drag on increases will impact the

June quarter. While price increases in siding seems to be progressing fine, a decking increase has not been matched by their largest

competitor Trex (TREX, Buy). We are not sure the amount of increase would create a meaningful share shift in the market if not matched.

Siding & Trim (54% of Sales) Volumes Continue to be Impacted by Soft New Residential. Revenues increased 7% y/y (-7% organic)

as volume declines were partially offset by price/mix. Exterior product volumes were down LDD% with SF down mid-double digits while

MF grew LSD%. Interior product volumes declined HSD%. Single-family exteriors continues to be impacted by a slow new residential

construction market with the Southeast and West serving as notable soft spots, particularly with the large national builders. Weather