Louis Gries - CEO Matthew Marsh - CFO.

Emily Smith - Deutsche Bank Peter Steyn - Macquarie Andrew Johnston - CLSA Brook Campbell-Crawford - JP Morgan Ramoun Lazar - UBS Andrew Peros - Crédit Suisse Simon Thackray - Citi Matthew Burgess - Bloomberg News.

Okay. Good morning, everybody. We'll go ahead and get started. Appreciate you joining the results announcement call for fiscal year '17. We're going to do it pretty much like we normally do. I'll give an overview of the year, and then Matt will give you a financial overview.

One thing I'm going to do differently, since this isn't a typical Hardie year, results wise, I'm going to give you a bit of summary.

As I'm finishing up my overview of the businesses, give you a summary of '17 and also a little indication -- not guidance on '18 but a little indication of how we're thinking about going into '18, and then I'll hand it over to Matt after that.

You'll probably get there through Q&A, anyway, but I thought I'd give you the kind of framework that we're thinking about the year. Looks like I need something to change -- the clicker? Got it. Sorry. Okay. So a lot of red arrows in that. Quarter came in weaker than full year, and almost everything's going to come back to manufacturing.

So I'm going to get into it in some detail. We even put in a couple of extra slides so we can kind of show you what that looks like. Full year, pretty flat on the profit side, better on the earnings per share, better yet on the cash flow. But again, not a typical Hardie year when it comes to delivering financials.

When we go to North America, which where the main story is, you can see volume was good, price was flat, basically down a hair. And the EBIT was the lost opportunity, both in the quarter and the full year. And this summary, on the slide to the right side of the slide is a pretty good summary. It's all going to come back to manufacturing.

And like I said, we'll going through that kind of step by step in a couple of slides. But on our network of plants, our efficiencies were down some so that affected us. We had less throughput than we thought we were going to have for servicing orders. And we also had higher costs due to these inefficiencies.

Then we had a big challenge on start-ups, which two of them didn't go as well as we'd wanted. One went really well. The one in Texas went really well and the one in -- the ones in California and Florida didn't go as well as we would have wanted. Being short, on throughput drove higher freight cost.

And the last point, which is separate to manufacturing, we did put some capability into the business. And that was a fairly significant step so it wasn't lost in the bottom line. But manufacturing is still the story on the bottom line. I must be pointing this the wrong direction. Okay, price. You can see, we've been flat on price for a couple of years.

That'll change this year. We did take a price increase April 1, so we'll be up about 3% next year. Flat for two years on price when our inputs were going up, so that did put kind of an incremental drag on EBIT during that period. But again, that's not the main story. It's how we performed on the operations side.

The top line growth slide, which we always show you, is fairly typical. Housing starts have been increasing year-to-year at a fairly moderate pace. And we expect it to look that way next year as well. This year says volume and revenue were about the same growth rate. There's no separation between the two lines on the top.

They're the same slope, but obviously, we got a slope advantage over the housing starts. We continue to do well in repair and remodel, which is actually our bigger segment. This is a new slide. We've never provided it and probably won't in the future, just kind of to give you a head's up. We're still part of the story.

On the manufacturing, you can see, on the left is your kind of existing capacity that was running coming into the year. And we gave you a little bit of historical because we've been talking about we were running with some inefficiencies we hadn't planned on.

And that's what you see in the last four quarters, We were coming off a very good trend line, which was almost eight quarters long, where we had really -- in fiscal year end of '15, start of '16, we took on a pretty major manufacturing initiative that did drive up our throughput rates in the plants. So we started banking on those rates.

And you can see this quarter, we obviously didn't go back to where we were previously, but we did drop down a little part of what we consider our normal range for manufacturing. The right-hand side of the chart just tells a little bit of the story on capacity.

So we have a nameplate capacity of 3.4 billion that are operating, that's for operating plants, and that includes your start-ups. And then you have 0.3 billion, so 300 million feet, that isn't operating. That's the Summerville plant and -- one of our lines in Plant City.

So currently, we're early stages of starting both those lines up, but in fiscal year '17, we didn't have any product off either of those. Now when you drop down from 3.4 billion down to 2.6 billion, which is really our current capacity, the 800 million feet is made up of basically 3 things which we list on the bottom.

The first is something that's in the business, and that's -- our nameplate capacity is based on 5/16-inch, full-width on a machine, medium-density fiber cement. And then you have a product mix that varies from that. And about half of the 0.8 billion or 800 million is 400 million in product mix.

Now we do have some technology projects, working on speeding up some of the products that fall into that category, but you should think of that 400 million, as kind of just built into the system. The other 400 million is either gross hours not run or the line efficiencies that we've talked about.

So it's either gross hours or it's rate -- number of gross hours or rate per gross hour. The rate per gross hour, we've already talked about on the slide to the left -- or the chart to the left. The gross hour utilization is not all kind of lost opportunity. You have bottlenecks that drive some of that as well.

So if you've increased the throughput in a plant and you don't have enough silica supply, which we grind our own silica, then you can't run the gross hours whenever you've topped out on silica. Certain products use a lot more silica than other products, so a lot of times, that comes to how well you're running and what products you're running.

Sometimes, as you expand the plant, you start putting the autoclaves in place and they get delayed. So there is a good -- and the only thing I'd tell you on our nameplate capacity, we basically went to a theoretical design back in the late '90s. And at that time, we had mostly small-scale plants.

And we, in our calculation, we had eight hours a week to clean up a plant, to do your maintenance, clean it up and restart it. As we get into larger plants, the time to clean them up actually goes up. So now, they're 12, 14, 16 hours.

Now we're, again, just like the example on the product mix, we had some projects in place that are starting to compress that time. The main reason I went into that long explanation, I want to you to understand this is not a sight from necessarily the gross hour.

Although, there are some slight opportunities, it's more where we're at in the development of our network in the company. So this just steps up our capacity since the downturn. So you'll remember, we idled a lot of capacity during the downturn, and then we also reduced gross hours on capacity that was running.

So when we started to get volumes back, coming out of the downturn, the first thing we did is just increased our hours on the lines that we were running. And then we started to bring up capacity that had been idled. So you can see, in fiscal year '13, we brought up a line that was idled in Loxahatchee.

And then in '14, at a very low level, we brought up the line that was idled in Fontana. Now we kind of re-engineered that facility because we pulled out one of the lines, put in a much larger, higher-throughput line, and then shared the mix plant autoclave, raw material supply for that plant.

So it's kind of the re-engineered facility, but the first step to start it up was just to start up the line that didn't have as many changes on it. The old line, not the new line. And then where we got here, in fiscal year '17, and kind of becomes our story for '17, we got in a very tight supply situation.

We had miscalculated the capacity that was going to be needed and the amount of time to bring it up, and we were forced to bring up 700 million feet of capacity in one year. And I think our organization has shown that even though the effort was good, we weren't ready to do that well.

And that kind of drove, that has driven our bottom line problems during the year. There's a few other parts of the story, which I'll cover, but, and you can see it starts showing up late in the year.

You can see, kind of from our working capital year-to-year, we came into the year with pretty good inventory levels and pulled those down as we weren't able to keep up with demand early in the year.

And then as it became hand-to-mouth situation on board, we started to really see the inefficiencies in freight and also the inefficiencies in spend as we throughput optimized the network. There's kind of four things that are driving delivery unit costs up.

One of them, I covered, it's the inefficiencies of the current network weren't as high, were higher than prior year, and then the start-up costs for the new lines.

But we also have an infrastructure cost that we took on as part of a commitment we made in July to go to best-in-class on safety, which we were at, at what we call two and 20 rate, which is a good rate for our type of industry, I think it's in the top quartile or right around there, some 75th percentile. And we just -- we had an accident in a plant.

When we investigated the accident, we didn't like what we saw, but also, part of that investigation, it kind of opened our eyes to the fact that at a 2 and 20, at the growth rate in our business, that's just a lot of accidents in our facilities even though it's small on a relative basis -- per 200,000 work hours, it's still a lot for our company.

And we felt we owed it to our employees to really aim for a much higher level of safety, which we call zero harm. We had a corporate task force -- corporate, I say. It was led by our GC, but we had representation from each of our sites. And they did a 6-month basically current-state assessment gap analysis.

And one of the big areas they identified early on is our infrastructure -- our spending on infrastructure wasn't keeping up, so we're letting -- things like ventilation, lighting, just cleanliness at a plant, how things were aging over time, we now have plants that are 25 years old, just wasn't consistent with a zero-harm, best-in-class safety.

So we put in a program to start catching up on that infrastructure spend. And when I say catch up, we have to spend at a higher level. That's how we got behind, but it's not a catch up like you'll see in maintenance. Maintenance is more of a 9- to 12-month catch-up. This is more of a 3- to 4-year catch-up.

So we'll continue to spend at about that $10 million to $15 million a year on upgrading existing facilities. And again, the base of infrastructure, I'm not talking about new machines or anything, lighting, concrete work, buildings, guarding, just everything that makes a work environment for the employees.

So I covered start-ups, I covered inefficiencies, I covered infrastructure. I kind of alluded to high freight because you now have throughput optimizing. And the fifth thing is the maintenance catch-up.

So when we -- you saw the chart where we really shifted the rate of throughput per gross hour in our plants a couple of years ago, so it was a surprise to us when we started to lose the efficiencies in a plant.

And one of the root causes of that has been that, unfortunately, we had taken a short-term view on maintenance spending plan over in the last 18 months or so, and that was starting to run into higher unscheduled delay and some long, large delays. And some of this was big things like wall mills, feed pumps, stackers, conveyors.

And some of it was more just the 47 pumps that are on a sheet machine. So pumps and motors, stuff like that. That spending kind of peaked in Q4, which is one of the reasons you were probably a bit surprised by our result in Q4. It had kind of risen to a high level in Q3, peaked in Q4, and it's now starting to taper off.

Now we'll end up -- obviously, because we are underspending, we'll end up at a higher level than we had been the last couple of years but a much lower level than we have been in fiscal year '17. Okay. So that's the U.S. and I do have a summary, and the summary is basically the U.S. because the U.S. is the driver of the result this year.

Asia-Pac, our Asia-Pac had a very good year. Pretty much everything points up. The only bump in the road this year in Asia-Pac was the Philippines. Australia, very strong result. Volume, price, cost was good. You could see, we're starting to get the efficiencies out of Carole Park.

We had the big start-up costs their last year, so that's kind of an easier comp. But it's also good that we're starting to get the inefficiencies that we saw when we went to put the investment. New Zealand, not as good of a story as Australia, but again, another good contribution year out of New Zealand.

And then the Philippines, we ran into a competitive situation, offshore competitive situation that affected both our volumes and price to some degree. As far as how the business is operating, it's operating fine. Our market position is just being attacked. And we just have to work through that in a better way.

It's just a new kind of playing field for the guys in the business and they'll sort it out, but it will take a time to sort out. It's not a big business, obviously, so it doesn't drag material numbers for the corporation. But we report -- we talk about it separately in the Asia-Pac business. So that was the negative. Everything else was positive.

ANZ was very positive. Okay. I'll give you my summary. So, fiscal year '17, good growth. And the way to think about the good growth is we did get an increase in interiors, but the exteriors number was much larger, obviously. Vinyl continues to decline against its market index which is kind of the plan.

We see vinyl as a product line or a product that's in decline, hard sidings, kind of substituting for it even though it sells at a much higher cost. Both Hardie and L-P were above their market index. Now we have slightly different market indexes, but the reality is we are both above and vinyl was below. On the volume.

In Q4, it looks very similar to the first three quarters. But I need to tell you, some of that is price increase pull-forward. So about 20 million feed is our estimate, it's price increase pull forward.

There is basically a current dampening on demand that's going on in our business right now, and I think it's not so much a price increase pull forward, that's just a quarter-to-quarter switch; it really comes down to that we had to put the business on allocation last year.

We extended lead times in some segments, and we're currently still working out of a service position that's below target for our industry. So normally, our industry service positions run in the 95 range, mid-90s.

We kind of aim toward 97, and right now, our business is running more like 80s because we don't have enough buffer between capacity or supply and demand at this point. So I'll talk to that a little bit more.

On the supply restrictions last year, like I said, it was just we cut it too tight and we brought too much capacity up in what amounts to just over a one year window. And that goes back to what I talked about Fontana, PC4 and Cleburne 3 were the main, that was the capacity coming up. Cleburne 3 went very well. That was the last one to come up.

And PC4 and Fontana were both very difficult. And then we also had the isolated inefficiencies in the rest of the network. So I want to point out there's -- this isn't an across the network inefficiency.

We had a couple of plants that we usually count on pretty heavily and have stayed at that kind of better part of the range up there, and that would be Cleburne and Tacoma. And we have a couple of plants that are really doing quite well against historical throughputs. Probably the most noteworthy would be Waxahachie.

But at Peru, Pulaski, Plant City, Reno, we did have the inefficiency issues that affected our ability to supply. Right now, trend lines are positive on both start-ups and on the broader network. So we've got some momentum back. We've worked through some of our issues.

Like I said, we're maybe a little bit more than halfway through our maintenance catch-up, so that's helped with some machine performance. And we have started to build back some buffer between supply and demand. A lot of that buffer was used for the price increase so it got pulled down, and now, it's being rebuilt again.

So the -- again, the manufacturing EBIT issues, start-ups, inefficiency, maintenance catch up, infrastructure increase, high freight and all that basically just results in higher unit delivered costs. So we had plenty of volume. We had a price we were expecting, but we had a much higher cost than we were expecting.

So obviously, this time of year, we don't give you guidance for fiscal year '18, so I'm just going to talk about how we're thinking about fiscal year '18. Just as a bit of an update, the order file is soft right now.

So how much of that is the price increase pull-forward, and how much of that is the dampening due to the allocation situation we're out of now. The lead times have been pulled back to normal, but our service position is still tighter than we'd like to see. The higher delivery unit cost will decrease as we move through the year, so it's not over now.

So I think most of you know we have about a 45 day lag with cost -- of producing versus cost of goods sold. That's what -- obviously, what goes into the inventory. We are just tapering off on the maintenance spend. I think that will kind of get back to where we consider our new normal levels maybe July or August.

So we're still spending more than we will as a rule in the future, we do have the start-up -- I mean, the throughput improvements, they're going to help us, start-up improvements helping us. Now this year, we're only going to start up 300 main feet of capacity. And that's not that easy, but it's not 700 and they're not brand-new lines.

So they're existing lines that have been kind of re-engineered to a small degree for start-up. We are, in PC, changing its product mix, so that's a little bit -- Plant City that is, that's a little bit more of a challenge than Summerville, which is coming up with some improvements but roughly the same production lines as we shut down.

I already talked about infrastructure. Spends will continue, so that's $10 million to $15 million. Freight will start coming off, but we've got to get the service position up before the freight starts coming off. So that probably starts coming off more toward the second half of the year. Raw material and energy is going to be up this year.

Pulp looks like it's going to be both more expensive than last year. Cement, obviously, we signed annual contracts, so we know that will be up. Gas is up a bit coming off of an historical low. We'll have some more cost increases, like I commented about '17, but not at the same rate.

So basically, my summary is we're going to start the year low in our range, and we're going to build to high in our range late in the year. And I think the growth's going to go the same way. I think we'll have a small comp -- a small PEG comp, Q1, which is a little short for a PEG comp, but just how we think about it, above the index.

We'll be starting out small in Q1, and I think as we get out of our service position and get back on a front foot in the field with our customers, get these allocation and lead time issues kind of further behind us, I think we'll be able to deliver bigger comps late in the year. So that's just a general kind of update.

So when you ask your questions, we can drill down a bit. But at this point, I'm going to hand it over to Matt for the financial review..

Good morning. Thanks, Louis. We'll go through the financials like we normally do. We'll start the fourth quarter group results. So net sales for the quarter were about $494 million. You can see they're up about 13%. Pretty similar growth on volume in both North America and international. They're both up around 12%, 13%.

International also saw in the fourth quarter, as it did throughout the year, good price increase, 6%, 7%. About half of that is mix and half of that is the annual price increase. Gross margins were down about 420 basis points, largely driven by the North America manufacturing discussion that was Louis just took you through.

SG&A was up about 10% as we continued to add capability in all three of our business areas. North America, international; and at a corporate level, we added organizational capability. Headcount, labor costs were up year over year as well as in North America. And in Australia, we also added marketing programs.

You see adjusted EBIT was down 8% in the fourth quarter. Adjusted net operating profit of $54.6 million was down for the quarter as well. If we go to the year. So for the full year, group sales were $1.9 billion, up 11%. Gross profits of $674 million, up 7%. Group EBIT of $393 million, up 11%.

And net operating profit on a reported basis of $276.5 million, on an adjusted basis when you take out the effects of asbestos, $248.6 million, up 2%. So net sales for the year, up 11%. That was North America, up about 12%, 13%. We had good growth on both the exteriors and the interiors business.

Obviously, exterior's growing a greater degree than interiors. And good growth internationally, as Louis covered in his section. International got price for the year, pretty consistently throughout the year, both on mix and on list price increases. Gross profits were up 7%.

But you can see margins got compressed largely due to the manufacturing and start-up issues that we had in North America. SG&A for the year was up about 15%. Similar to the fourth quarter, it was in both business units, and at a corporate level, primarily in labor, but also market and sales-related programs.

If we go to foreign exchange, foreign exchange really wasn't as big of a factor for the year. You can see it's about flat, had a pretty minor result overall on the face of the financials. A couple of million dollar favorable impact on adjusted net income, marginal impact on revenues. Input costs were a good tailwind last year.

Most of the input costs across the board trended favorably in the first half of the year. And then, as we got to the second half of the year, both the indexes and then our buying resulted in increases in the input costs. So pulp, in the first of last year was on a decline, and it started to level out. It's starting to increase now.

External forecasts have it up for next year. Cement prices. At least, the index that we're using here, the external data source we're using here, says up 4%. I'm expecting it to be up higher for next year. Our purchasing is better than that, so we'll -- so we won't buy as high as the market increase.

But cement, particularly in North America, continues to be in an oversold situation. Gas prices are starting to trend up. They were up 5% in the fourth quarter. They were down for the fiscal year, so that similar commodity trend is being seen on gas.

Freight, Louis talked a little bit about freight costs from a performance standpoint but the market rates are also up. So market rates are up, and fuel is up on top of some of the efficiencies. Obviously, the inefficiencies are within our control and we'll work through those throughout fiscal '18.

But I expect that market rates are going to continue to trend up. And then electricity is up slightly as well. So material inputs for fiscal '17 were a little bit of a tailwind for us a little favorable. For fiscal '18, we're not expecting that to repeat. We'll go through the segments real quick.

So you can see, for the quarter and the full year, EBIT in the North America business was down 11% in the quarter and 2% for the year. The fourth quarter is down more than the full year as some of the non-routine maintenance and the plant performance spend started to peak, particularly in the fourth quarter and late in the third quarter.

The EBIT was obviously pressured by the 3 big items that Louis talked about. I think he broke them down into 5 categories. So plant performance, start-up costs and higher freight. And then outside of the variable costs, obviously, we continue to invest in the business to build capability to support the growth agenda that we have.

On the international, they had a good year, both top line and bottom line. Even when you take out kind of the nonrecurring Carole Park start-up costs from the previous year, the team did a good job delivering on both top line and bottom line last year. The other business, as you know, is our strategic business development areas.

You can see the losses in those areas decreased as we expected that they would. Probably not at the rate we expected they would, but not materially off, certainly, at a group result level, so losses for the quarter of about 2 million, and for the year of about 6 million, 6.7 million.

R&D is -- continues to be on strategy, right around 2%, 2.5% of sales, right within our target range. The fluctuations that you see, either for the quarter or for the year over the last several years, is just normal fluctuations of the number of projects that we've got going on at any given time.

About $5 million in increased general corporate costs, primarily labor. There's some discretionary spend and some foreign exchange that sort of offset each other, but I think the primary driver here is labor cost.

Both as we're increasing labor at a corporate level, plus we're obviously recruiting for some of the open senior management roles, and that comes at a cost as well. If we go to income tax, Slide 23. So 24.5% adjusted effective tax rate for the year. Right around where we had been guiding for most of the year.

A bit lower, obviously, as the North America results were a bit short of where we thought they were going to be, that has an effect overall on how we estimate income taxes. We continue to pay income taxes in Ireland, the U.S., Canada, New Zealand and the Philippines.

And we don't pay income taxes in either Europe, due to the accumulating losses, or in Australia, due to the deduction of the asbestos obligation. If we go to cash flow. We generated about $292 million of cash flow from operations. It was up about 12%.

It was really a combination of income adjusted for noncash items plus a good working capital performance. Working capital is a combination of just normal receivables and timing there. Obviously, inventory was, worked against us, so we used cash for inventory purposes.

We had drained down inventories going into last year, and then we had, obviously, we've built up some inventories coming into the fourth quarter this year and through the fourth quarter this year. So inventory was a use and then accounts payable was more normal. It's kind of timing than any kind of programs.

But for the year, you can see that working capital was better year-on-year. And then obviously, our annual contribution to AICF last year was higher than the prior year by about $30 million. We had almost $104 million of CapEx last year. I'll get into that in a moment.

And then from a financing standpoint, we had total returns back to shareholders last year of about $273 million, both between the dividend and the share buyback. So up slightly from fiscal '16, where we returned about $266 million, and fiscal '16 was almost exclusively through the dividend.

And this year, we had both the first and second half dividends in addition to the share repurchase program we announced in May and executed during the first half. So for the full year on CapEx. There we go. For the full year on CapEx of about $102 million, you can see that it was primarily maintenance CapEx.

As we get into the late half, second half of the year and into the fourth quarter, you can start to see the ramp-up of the capacity projects. So we obviously continue to start up both sheet machines in Fontana, with the, we call it, PC4, the third operating sheet machine in our Florida plant in Plant City. We started up the new line with Cleburne.

We also completed the majority of the re-engineering work that's going to be required to start up Summerville. Summerville's on pace to start back up in the early first half of fiscal '18. It's in process of starting up here in the first quarter. We also announced, I think it was in February, the greenfield capacity expansion in Tacoma.

And there's some early money that was spent in the fourth quarter in order to secure long lead time equipment, and we'll continue to spend that money throughout fiscal '18. And then we're about halfway through, a little bit more than that now, on the build-out of capacity in the Philippines. Pretty inexpensive capacity relative to the other start-ups.

But we had -- we had that capacity going on throughout the year. Over the next several years, capacity is going to continue to be -- capacity expansion is going to continue to be a feature. I'd expect that we would spend approximately $250 million a year for each of the next 3 years on a combination of capacity expansions and on maintenance CapEx.

The primary drivers of the $250 million each year will be the Tacoma site that we've already announced. Most of the spend has not occurred on that yet. You'll see most of that come in fiscal '18. And then we haven't announced an amount yet, but we're very close to announcing a new plant in Alabama and that will be a greenfield site.

And I'm guessing by the time we get to August or so, we'll start talking about the cost of that facility. And so when you take the 2 greenfields on top of about $100 million or so of maintenance CapEx a year, that's where you get to kind of this $750 million or so over the next 3 years. Capital allocation.

No real change on how we're thinking about the balance sheet and how we're thinking about financial management of the company. It continues to start with overall strong financial management.

Obviously, margins weren't as strong as we wanted them to be last year and while cash flow is -- operating cash flows were strong, we've no doubt we left some cash on the table given the inefficiencies, particularly in the North America business. And you see our ratings with the 3 agencies.

We received a positive outlook statement from S&P and a reaffirmation of the investment grade with Fitch during the fourth quarter. No change in the capital allocation priorities. So our top priority continues to be organic growth and funding both R&D and capacity and manufacturing-related investments in order to support future growth.

The ordinary dividend is our #2 priority. And then, # 3 is kind of everything else, so maintaining enough flexibility in the balance sheet so that we can be strategic in the event a good opportunity presents itself as well as having plenty of buffer given the cyclicality of industry and the markets.

And then to the extent that there's additional amounts that are left over from us wanting to maintain a 1 to 2x leverage ratio on the balance sheet, those additional amounts will be returned back to shareholders or at least be considered to return back to shareholders largely through a share buyback program.

On the balance sheet side, we're still well within and at the low end of kind of our 1 to 2x leverage range. You see our facilities are largely unchanged from February when we spoke last. Maturity, overall, is about 3, 3.7 years. And total debt's close to $500 million, and liquidity's in good shape.

If you go to a quick liquidity profile, so the balance sheet remains to be in a very strong position, both from a cash and our net debt position of just shy of 400 -- or just over $485 million in net debt. No change in the corporate debt structure from the last time we spoke, so $500 million unsecured credit facility as well as a $400 million note.

We're at 1.1 in terms of our net leverage at the moment, so on the low end of our range but within the stated range of 1 to 2x. In terms of asbestos. The KPMG and AICF updated the actuary report as of March 31. There's a $48 million reduction in the undiscounted, uninflated central estimate, down to AUD1.386 billion.

The decrease of a, was about AUD164 million on a net present value basis, down to AUD1.740 billion. It was a combination of the actuarial assumptions, a decrease as a result of the payment that was made last year as well as about AUD117 million due to the lower future insurance proceeds.

AICF kind of came to a computation agreement with the insurance company and received a large chunk of cash, about $117 million of cash during the year, which was a good outcome for them. Total contributions last year were $91 million that we made during the fiscal year.

Since we established the fund in fiscal 2000, or I'm sorry, in February 2007, we've contributed almost AUD920 million to the fund, and we anticipate we'll make another contribution this July of about $102 million per the 35% of our free cash flow as is defined in the AFFA.

If we go into the claims for a moment, you'll see that for both the quarter and the full year, all the claim trends were very favorable, both in total and for the key types of diseases, so mesothelioma, in particular. So for the quarter, the claims received were up about 6%. For the full year, they decreased about 3%.

For the full year, claims were about 11%, below the actuarial estimate. You see, mesothelioma claims for the year were about 6% below last year and 7% below the actuarial estimate. Claim settlement sizes for the year and the quarter were also below the actuarial estimate by quite a bit. That was a combination of large claims.

We're seeing favorable trends in age of claimants, which is a positive sign in terms of the overall liquidity of the fund. And the number of non-large mesothelioma claims were also lower. Louis hit quite a bit of this in his comments at the end of section. As we think about fiscal '18, we're thinking a U.S.

market index that looks a lot like it did last year. So a new, good new construction market that's up kind of high single digits, a repair and remodel market that continues to be very robust around 4%, and new construction forecast at the moment. We've got 1.2 to 1.3, and we primarily rely on the Dodge construction starts data.

EBIT margins, we're expecting to be within the range. Lou talked a little bit about we'll go into the year, the first half of the year, we'll be at the lower end of the range, and then we'll finish at the upper end of the range as we get to the second half of the year.

The Australian business, we expect, again, a market for fiscal '18 that looked like a lot like fiscal '17, and we expect that business will continue to grow above its market index, and similarly for New Zealand. So with that, we'll go into questions..

Emily Smith from Deutsche Bank. So just a couple of questions, I guess, looking into the first half, more specifically, the first quarter. I guess, you put the information in the management discussion on Page 4 suggesting that the percentage change in the gross margin in the quarter was negative 5.5 points.

I guess, going into the Q1 of fiscal '18, would you expect that surely that 5.5 points negative should turn around quite a bit because you've got the price increase is a pretty significant offset at 3 percentage points? So I guess -- and I guess bearing in mind that Q1 '17 EBIT margin was 25.

I guess, it's sort of hard to see how you'd be at the low end of the range if you get a 3% price increase even if the production and start-up costs stay at the same sort of level? Just wondering if you can explain that..

Yes, we do see it at the low end of the range. I'd say right through the year, fiscal year '17 is not going to be a good year to think about from a comp perspective. To me, the EBIT margins we are delivering early were a bit artificial. They reflect too low of a spending on maintenance and some other things in the plants.

Then it carried over from fiscal year '16 and we started to correct, or adjust for, I guess a better way to put it, and starting in July. And we kind of built that program over -- through the year and it peaked, peaked in December, January, February. Part of that was because we are identifying things as we are going.

We -- as most of you know, we were surprised by so many issues we ran into first quarter -- end of first quarter last year. And then, we started to reset the business. I think the reset wasn't as efficient as it could have been, but it was okay. It was a big change for the organization. I think they handled it well.

We didn't identify everything we want to do right off -- right out of the chute, but we did by the time we got to about October and November have everything identified and programs to address it. So you're right; you're going to get 3% on the price line, which is good.

You're going to have much higher delivered unit costs than you had last year due to the things we've talked about, which is your maintenance spending's still high, your board you sell this quarter will be largely produced either in March or April. And freight costs are high. I can't remember if I said that.

So anyway, we do see ourselves down near the bottom. Oh yes, and then our volume comp's not going to be as good as we'd want it to be. It's not going to be as strong as it will be for the year, I don't believe..

So does that mean that you're not expecting start-up costs and production costs to fall in the Q1 '18? So you expect them to stay….

Well, we're starting Summerville right now. We're starting to turn the PC 3 machine. We're still running PC at about two third efficiency, PC 4. That's a big machine down there. Cleburne 3 is good. It's at a point now where it's producing at very near normal unit cost. And then Fontana's still still. So we still have efficiencies in the system.

They're just not going to be to the same degree as we had in '17. They're going to be significantly less. Now the way you've got to think about start-up costs for Hardie, I'd say, hey, we started up 700 and we didn't do it as well as we should have and we never should have tried to start up that much of the year. We're starting up 300 this year.

Well, basically, if we want to grow at the rates we want to grow, we're going to have to start up 300 every year. So this is more of a 300 -- this is more of a normal year on start-ups.

The only thing different is you still have the tail end of the PC4 inefficiencies and the Fontana inefficiencies always -- also coming into the business, mainly early in the year. They're getting less by quarter, there's no question. But they're still there..

But I guess, just back to the numbers that you give us.

I mean, it implies that -- versus the previous corresponding period, that the margin would only be down around -- even if you assume that there's no reduction in the start-up and production costs, it sort of only assumes that the margin will be down about 200 basis points with a 3% price increase, which is a 23 margin at the low end.

Does that make sense to you or?.

Well, I started to say don't look at our comp last year. So that's where I'm going to end. Don't look at last year. It's an artificial comp..

Louis, Peter Steyn from Macquarie. Just in relation to the service issues that you outlined and the fact that you're -- I suppose you're calling out [dive hot] levels in the 80s.

Is there any negative franchise impact from your customers? What's the sort of sense from the market?.

Yes. Thanks, Peter. There's no question, customers would have a little fatigue with Hardie at this point. Allocation last year, long lead times in a couple segments. And then this year, we get ourselves back in pretty good shape. We have a price increase.

Of course, they've got to take advantage of that pull forward price increase because they've got protection out there for their customers. So we give them an opportunity to buy about 10% more board at the old price so they can take care of their price protection commitments. So we pull all that down, and then we're back into service of about 80.

Now there's two parts to a service equation. There's the on time and full, which is in the 80s. And then there's the severity, how late are you. And right now, we're in the 80s on the on time and full, but we're doing well with the how late are you. So normally, two to three days late.

So because we have a channel between us and the job site, there's no danger that we're holding up jobs if we stay with a severity of two, three, four or five days late. It's when you hit two, three, four weeks out that you can run under those risks. So you'd say franchise damage makes it sound worse than I want to make it sound.

But yes, there's fatigue out there with things. I mean, people that do business with Hardie would like to feel like they push a button and what they expect to happen happens. And that's kind of our reputation. And over the last 12 months, that hasn't been the reality. So the sooner we can pull out of that situation, the better.

But it won't -- we're trying to do it in a big -- in a seasonal -- in the building season. So it's probably going to take us -- I don't know. I think it's going to take us to get through there first half and we start getting the seasonal downturn a bit.

And then all of a sudden, we'll -- because we've got to pick up like not a little bit of inventory, we've got to pick up 60, 70 million feet of inventory to really feel comfortable. So our run rate is not that high above our order rate at this point..

Just could I indulge of one more? If you strip out the impacts of production costs and start up costs and just thought about raw material increase, cost push versus your 3% price growth, do you think that at a fundamental level, you're offsetting the cost push that you get?.

We're easily offsetting that.

What -- do we have any kind of ballpark that we're going to be external on raw material forecast?.

No, we're not sharing it..

We're not going to ballpark it, but the 3% will easily offset, easily offset..

Andrew Johnston, CLSA. Just if I can talk about your commentary around the last -- commentary on the last quarter, Lou, around what margins should look like at this point in the cycle.

And I think the comments were that were it not for the start-up capacity issues that you were having, you would expect margins to be, and I can't exactly remember, was it at the top end or above the top end of the range.

But what's changed in the last quarter? And I suppose also, as part of that as well, following on from Emily's comment about the gross margins. If you look at the gross margin in the third quarter versus the fourth quarter, it continued to decline.

Is that all just part of the comments you've made now or is there something else going on?.

Yes, I think we covered it all. It's kind of where your -- we are flat -- we are on a flat part with some of the start-ups now. We're improving on those start-ups. We're back with a positive slope. And then, the other thing is -- I'm looking for a EBIT margin slide.

Yes, so you got about 45 -- I mean, the board we have in inventory now is expensive board because we just started tapering down as the throughput is going up. Now when you have the denominator and the numerator moving at the same time in the right directions, it can change pretty quickly. But so far, we're just not there yet.

So the leading indicators are very good on the manufacturing side. But until you deliver the result, you just don't have it. And then, we actually get it 45 days after we deliver the result. You start seeing it. Externally, you start seeing it. Even internally, we're seeing early signs rather than okay, we got it.

We're seeing that okay, we're getting it rather than we got it at this point. So I think back in November, I said, this is a two to three quarter issue we have in manufacturing. It's probably playing out to be three. Maybe you're going to say, well, it sounds more like three. It sounds like -- more like four than three, I don't know.

It's -- we're off the bottom. We've had good trend lines. So far, you and I have seen in our results and I don't -- you'll see I think maybe a hair of improvement in the first quarter but not much. So the EBIT margin. You asked a question. I kind of remember the -- do I think Hardie should be running at or above the 25 this type of market? Yes.

There's no question. We should. It's just internally on the operating side of the business, we haven't managed it as well as we should have, and that's the difference between being 25 and 26 versus where we finished last year..

You made a comment earlier, and I just wasn't quite sure of the context because you said that the margins that we saw were probably artificial..

Yes. What I mean by that and I -- there was nothing wrong with it. All the accounting was sound. It's a quarterly thing. And we were in a period where we were under-spending on maintenance and a few other things, and that was kind of also on a slope that was under-spending every quarter. It was getting greater every quarter.

So in July, like I said, we had a bit of a wake-up call in July. And because -- about this time last year, we started getting short on board, okay? Before that, we were fat and happy thinking everything was fine. We started getting short on board, and that pushes you right to throughputs. Well, I think I have the capacity in place.

Why am I not getting the service position or the throughputs I want? And that led to a pretty, pretty good, pretty deep drill down on manufacturing.

And like I said, it just, even though we had taken that nice step up between '15 and '16, and we were still operating at a higher level, we weren't operating at the level we had planned, okay? And part of that '15, '16 start-up, I think it had too much on the numerator as well as gains on the denominator, okay? So unit cost is numerator/denominator.

I think we did a really good job on the denominator. And we maintain most of that, although you can see we went into a tailspin. We're still at a much higher level than previous. But once we see, once we fully understood what the impact of programs on the numerator were, we had to reverse course. And that's what last year is all about.

And that's why I'd say the first quarter, artificial's the wrong thing because I don't want to mislead anyone into thinking there was anything wrong with our numbers. It was the game plan that was wrong. It was just not a way to run a business and it delivered a good, short-term EBIT result but not a sustainable EBIT result..

So how do we reconcile that comment that those high margins above 25 were unsustainable with your comments that the business at this point in time should be delivering those sorts of margins?.

Yes. It's a good comment. But I mean, we've got, we -- the other thing you've got to remember last year, we skipped price, okay? So do I think Hardie should skip price when the market is, has inflationary factors and most of the rest of the market is taking price? Not unless there's some specific reason, some specific initiative.

And so the way you get to your above 26 is good volume growth, some price improvement that more than takes care of your cost and then good, good operation of your network. So last year, we had kind of, we didn't have the operating of the network. That was the big problem. And we didn't have the price going for us either.

We did have the volume going for us. So we did 1 for 3. We're like baseball players. We hit 3 33..

And just on the order book you mentioned it was a bit soft.

Any particular region?.

I didn't even look at it region-by-region. But if there is a particular region involved, it's just normal regional variance. We have no regional problem in the business. Any other questions in the room? Geez, I'm going to give you an overview every time [just] on the questions. All right.

How about on the phone?.

We do have your first question. It comes from Brook Campbell-Crawford from JP Morgan..

Brook here from JP. I had a question on the SG&A expense. You've explained quite well the step-up in FY '17 due to increased labor cost and sales and marketing programs.

Can you talk a little bit about what that figure looks like next year? Are you going to continue to invest ahead of sort of penetration expectations into the market in the U.S?.

Yes, we will continue to invest. You just won't see it year-to-year to be the same level in actual cost. But yes, one of the things we did do very well in '17 is we kind of reset our market development initiative against vinyl, and we got a lot of resources. Yes, I think we improved the game plan. We've got a lot of resources on that initiative.

And like I said, there's 2 parts to our growth equation. One is what does vinyl do against its market index? And they're declining and I think they continue to decline or accelerate. And then you've got us and L-P as the 2 largest hard siding players kind of growing above our market index.

So L-P, as you know, has kind of taken a good enough position against us, so there's work to be done there by Hardie. But we didn't get much of it done in '17 because of our shortages in board.

And we've got to make sure we get that buffer built back in so we can get more serious about our programs against close alternatives, which L-P is one of them..

That make sense. And a question for Matt on the CapEx side. I think I recall the guidance being for CapEx to be north of $20 to 25 million for FY '17. And I don't know if you came in a bit lower than that. And if you can talk also a bit about what the difference was in the period if those figures are correct..

Yes, I think it's just timing of when some of the CapEx hit for the future expansion projects. So we've obviously got to come out there on timing of Summerville. And I think it's just timing between the quarters. Nothing kind of -- no change in direction or strategy..

Okay, fine. And then one more just on price. You talked about a 3% price increase for this year.

Will there be any benefit or impact due to mix over and above the 3%?.

Yes. So product mix, segment mix, customer mix, all that will add up to a positive..

Your next question comes from Ramoun Lazar from UBS Investment Bank..

Just one follow-up on Brook's question on SG&A, Matt.

So just wondering, if that $75 million SG&A cost in the fourth quarter, which is similar to the third quarter, should we assume that is now the normal sort of quarterly run rate for fiscal year '18?.

Yes, I don't know if I'd -- I don't think I'd -- I'd probably be misleading you to say take the $75 million and plug that into each quarter, and that's kind of what you're going to have in fiscal '18.

We're going to continue to grow it in fiscal '18, not to the same rate that we grew it in fiscal '17, but I'd also expect it to still grow at a fairly healthy clip as we're continuing to invest in the organization and in some of the sales and marketing programs.

So it won't grow quite as much as it did in fiscal '17 compared to '16, but in fiscal '18, it'll continue to expand..

Okay, good. And then just one for Lou. Just your comments on PDG in the first quarter.

Lou, just could you elaborate on those comments that PDG will be weaker than you expected?.

So growth above market index. Quarterly is too short but what you can see in our growth above the market index, as we went on the allocation and longer lead times, you could see some of the momentum in that area come off.

So some of that was giving up business we already had that we considered not at a profitability level that made it worth keeping and trying to trade that off for new business or core business, either growth or core.

So I do think next year, we will be making some trade-offs on the volume we desire the most in order, as I said earlier, to get our buffer there, if we went through the business. And I'm repeating myself now. Last year was manufacturing, okay. That's what I want you to remember. Last year was manufacturing.

But part of having an EBIT problem in a business is you drill down in a lot of areas and not just manufacturing. So we went through what product lines were using capacity and at what rate. And then what the profitability of those product lines is.

And as you know, most things at Hardie are very profitable, but we did find that not all things were as profitable as you would want them to be if you're going to just find new investment in capacity. So we had about 3% of our business that kind of falls into that category.

And my thinking is we either going to get the profitability up on that 3% or we've got to move away from that 3% and use that capacity for kind of product lines that can generate the kind of cash that supports capacity expansion. So that's part of the PDG equation.

The other part is what I talked about on the allocation and long lead times followed by service position not being as strong as we want it to be in a building season..

Your next question comes from Andrew Peros from Crédit Suisse. Please go ahead..

Lou, just a point of clarification around that safety initiative you talked about. I think you called it investing in infrastructure, 15 million per annum for three years or so.

Is the allocation of that expense coming through in the North American EBIT line? Or do we see that come through in the CapEx line?.

Yes, it's a bit of a mix. So some of it's operating CapEx and some is expense. But enough of it's expense to where you definitely see it in our bottom line..

Okay. Also, in the Windows business, it does look as though the losses are slowing. I think previously you called out that, that business at a minimum will be break-even in FY '18.

Is that still, I guess, an expectation at this point in time?.

No, I think we lost a year. We didn't lose a year in capability but we didn't run that business model as well as we should have last year, so we kind of lost a year. So I'd push that back until '19..

Okay.

So similar losses in '18 as we saw in '17, I guess?.

A little bit better. A little better..

Okay. That's very good. Also, just maybe a question for Matt around depreciation. Following the material step-up in CapEx, wondering at what point we should expect to see the D&A charge start to step up? And if you could, perhaps help us out with a bit of guidance around that. That would be very much appreciated..

Sure. So I think in the appendix, there is a slide on depreciation. But I think it was around 80 something -- $80 million or so last year. That was a step-up from the prior year. I'd say if you looked at the last three years on depreciation, you'd see kind of a fairly modest $10 million or so a year increase in depreciation, not even quite that much.

And then it will obviously continue to step up over the next couple of years. But what you've got to keep in mind is that while we're investing in new capacity, some of the old assets, obviously, are getting to a point where they're fully depreciated.

And just with the timing of when we brought those assets on, call it 15 to 20 years ago, and now the new assets that we're bringing on, you do get -- you don't get a one for one step-up in depreciation the way you might be expecting. So depreciation will expand.

You'll note the last couple of years, it hasn't expanded quite at the rate that CapEx has expanded, and I think that's a pretty good framework to think about for the next couple of years..

That reminds me of the summary comment I was going to make on our capacity. So you saw all that capacity we brought on in '17. We didn't bring on as well as we should have, obviously. And it's had ramifications for this year. But that brownfield capacity from an investment standpoint is very efficient capacity.

So as it gets up and running, we'll obviously be benefiting from that. As far as the greenfields, every greenfield comes on at a higher cost per unit. But we'd expect -- number one, we're working on those CRs to make sure we don't spend more than we need to in a greenfield situation.

And two, now for all our start-ups, we've finally learned our lesson so we start our -- we start -- our start-up activity for Tacoma will start a year before the actual start-up at a plant. So we'll bring in people, management. It will be a much more formalized start-up program.

And I'm certain just like we did in Cleburne, I'm certain we'll do a way better job starting up the next three major capacity adds we have. But again, greenfield is going to be higher cost per unit, where these brownfield additions were really efficient from a cost per unit standpoint..

We have one final question. This comes from Simon Thackray from Citi. Please go ahead..

I just want to start -- get back a little while with your comments on sort of bringing facilities and process, I guess, into the current era around the zero harm and the cost of doing that. I think you referenced $10 million to $15 million a year. I just wanted to clarify.

Is that an ongoing expectation for cost the next few years to bring facilities up to speed?.

On the infrastructure?.

Yes..

Yes, I think you're maybe two to five or something like that, two to five years..

So we should assume that you'll be spending $10 million to $15 million for two to five, is that, right?.

Yes. And that's across nine facilities now..

And so how much was spent this year?.

About that rate on the infrastructure part. But we spent it quicker than the full 12 years. We didn't start until after July..

Just going back to something a little bit obscure. In your concentration of risk in your accounts, you talked about customer A, which I assume is the same customer year-on-year, '15, '16 and '17. And I know you report customer concentration risk based on gross sales, not on net sales, as you report in your financials.

But if I back solve for the concentration risk again and look at the spread between gross sales and net sales, it would seem the discount, or whatever it is, the spread between gross sales and net sales has been increasing year on year. And that customer concentration has been increasing certainly '17 on '16.

Can you just talk about the mix of customers with the major homebuilders, the price discounting, what would be driving that spread? Or is that freight or something else that I need to think about or..

Yes, so I think you're probably referring to something that's in our 20F?.

Yes. [indiscernible]..

Yes, and where we talk about kind of top customer?.

Yes..

Yes. So obviously, we don't disclose what the top customer is, but we do obviously have different tactical pricing strategies by segment. And in some cases, within the builders, depending on what our market penetration objectives are.

So what you're probably picking up on is just the difference between that particular customer and programs that may be available to them depending on where they're operating and then other customers where that same program doesn't exist..

I presume it's a U.S.

customer, Matt, yes?.

Yes, that's true..

So that would be -- so that makes it more like 15% of the U.S.

net sales for the year?.

Yes. I think that's a good estimate..

Okay.

So that being -- if there's a push towards greater concentration of the major homebuilders, does that mean that the discount potentially or the gap between gross sales and net sales gets larger? Is that the idea because they're on preferential treatment?.

Let me -- I'm not fully understanding. I guess the easiest way to tell you is we haven't changed it. So there's been some consolidations in the market. Now we don't sell builders direct. So it wouldn't be -- it wouldn't be so much about builders. But we haven't changed our basic customer strategy. We sell through distributors. We sell direct to dealers.

We sell direct to boxes. We sell direct to some tile pro channel. So we haven't changed anything. So I haven't paid attention at the information you're looking at, and I'll ask Matt to show it to me later. But we haven't made any changes. We haven't consciously done anything, and we don't think we -- we're in a position that we have to react to anything.

We like where we're at customer to customer and from a risk perspective, also from a access to market perspective..

Cool. And then just going back, you're made it -- you were pretty empathic, Lou, about the 3% price rise covering any increase in cost expectation for the year in terms of the margin. So I think on a like for like basis, on your gross margin, you'd have to see a 9% increase in the cost of goods sold.

So is there any area -- I mean, looking at pulp obviously, but looking at input cost, is there any area that you would be more worried than less over the next 12 months?.

Yes. The question I think Peter asked me was the material -- the raw material input cost increases rather than cost of goods sold increases.

I think cost of goods sold is going to comp higher -- or it won't comp higher than last year but the reality is cost of goods sold above kind of like an efficient level this year, we won't hit the level we want in one year. But we think we're on a program that we drive the business back to a level we want.

And like I said, that's both the numerator and the denominator. We're getting -- we got programs on the numerator to kind of play that catch up and then let it taper down to a run rate level we're comfortable with in the future.

And then in the denominator, one thing I didn't cover is as we've been working on these throughputs in the manufacturing, similar to what we saw in '15, we do see some upside not only to get back to where we want to be, the level we were at in '16, but we also see some throughput opportunities beyond that, which we've put some technology projects in place to try and -- I guess I did mention, try and compress the discounts for the product mix we're running.

So that's code for kind of new products don't normally run at the same throughput rate is kind of the old established products that have long experience -- we have longer experience curves on. So we've accelerated some of that work. So yes, I mean generally, again, the summary is '17 was a miss for us.

It wasn't a miss on the market side but it certainly was in operations. And it certainly was from a financial result. Just like anything else, when you have a miss, you've got to learn from it.

I think we got -- we think -- I think we're committed to a program in manufacturing that gets us exactly where we need to be, not overnight but certainly, for future growth. And we'll get our leverage back on our financials as we implement that program..

Sure. And just on that market side, Lou, you made I think the comment earlier that the order book's [indiscernible] that was softer than you would have thought. I presume that the impact of the pull-forward volume in to margins was dealt with predominantly in April and early May.

So is this tacking what we're sort of seeing in slightly disappointing permit sort of data? Or how do you feel about the order book, the recovery in the order book or the growth in the order book over the next, I don't know….

Yes, mixed feelings. If I had a really strong order book right now, I'd be more worried about service position. So I'm okay where we're at. I mean, you can't run from the fact that we're on allocation, that we had long lead times and we had a low service position.

The question was asked, are you doing damage to the company? Hey, we surprised the market on the downside -- our customer market on the downside by getting short on capacity, just like we surprised our investors, being short on capacity.

So the only thing I could tell you is we have the game plans in place, we're committed, we'll get it done and we'll work through it.

I think our general guidance on this thing when we realized the extent of our problem back in probably -- I can't remember exactly when we talked about -- in September, probably didn't fully understand it until November. But we said it was a two, three quarter problem and I think it's two, three maybe three plus, one month or two problem.

And we'll be on a good track. But we're just pointing in that direction right now. Like I said, the leading indicators are good. Resourcing on the manufacturing side of the business, we've filled some holes. We're doing a good job on kind of knocking some stuff over, but it's all leading indicators.

We've still got to deliver the result and we'll do that on the manufacturing side as we move through the year. I think we'll have a more positive story every quarter for you on the manufacturing side..

Your final question comes from Matthew Burgess from Bloomberg News. Please go ahead..

I was just wondering if you could provide an update to the vacant senior management positions that are there at the moment, how the recruitment is going on for that..

Management positions. Senior management..

Oh, management. Yes. No, actually, so most of you know we had some turnover of our senior guys, long-term guys at Hardie, for different reasons but Ryan Sullivan left last July and then Mark Fisher left early August, I mean, early April. So we're in a resetting of the GMT, which is our senior team at Hardie.

And the teams that work for the GMT, we have a major initiative strengthening those teams. We brought in a new Head of HR in January, Kirk Williams. He's started. And just recently, in this room, actually Jack Truong has joined us as Head of International. So we're happy with the progress we're making.

We think we're in the final stages with a Head of Sales and Marketing in the U.S., and we also have an active search for a CTO. So we believe we'll fill out the kind of reset GMT this calendar year, maybe bringing the CTO on in October, November time frame. Yes, I'm pretty excited.

Jack certainly brings some background experience and capability to Hardie that we haven't had at the senior team in an operating executive. And I think we'll accomplish the same with the Head of Sales and Marketing. And we're very early in the CTO, so I haven't seen any individuals for that position yet.

But I'm optimistic it's been a pleasant surprise that a company like Hardie, which is still, although we have a good market cap, we're still a relatively small company, and to attract an executive like Jack is very encouraging for me.

I think we're going to do a good job filling out the GMT and really resetting the capability at the most senior level at Hardie. All right. Thank you. I appreciate you joining today..