Morningstar | James Hardie’s New CEO Truong Up To The Task; FVE Unchanged. See Updated Analyst Note from 06 Sep 2018
Dr. Jack Truong, President of narrow-moat James Hardie’s International Operations, will succeed long-standing CEO Louis Gries, who in early 2018 announced his intention to retire. Truong is a natural choice given strong credentials and the Board’s prior stated intention to internally source a successor. Gries will retire toward end of fiscal 2019, following an approximate six-month transition period. During this period, Truong will assume the role of Chief Operating Officer, taking responsibility for the group’s global business.We maintain our AUD 21.20 fair value estimate for Hardie, and our Standard stewardship rating. In Gries, Hardie loses a 27-year company veteran who rose through the ranks to CEO in 2005. We are optimistic given Truong’s management and technical credentials, however, and view Truong as up to the task of leading the company through its next growth phase, which focuses on penetration of fibre cement in Europe. Having joined Hardie in April 2017, Truong previously served as President and CEO of Electrolux’s large North America Division, a business with net sales in excess of USD 5 billion during his tenure and representing one third of the Electrolux group earnings. Prior to Electrolux, Truong held senior leadership roles during a 22-year career at the 3M Company, including general manager of global construction and home improvements and the global office supplies divisions.
We’re also encouraged by Truong’s technical background. Holding a PhD in chemical engineering, Truong is the recipient of several U.S. and international patents. We believe this places him well to perpetuate Hardie’s intangible asset-led narrow moat, with continued innovation of the Hardie fibre cement product range necessary to protect its leading position in North America. We believe he is equally well placed to manage the penetration of the European market, with innovation required to tailor the fibre cement offering to address a largely masonry construction market.
James Hardie Industries is engaged in the manufacturing and selling of fiber cement products and systems for internal and external building construction applications in the United States, Australia, New Zealand, the Philippines and Europe. Co.'s fiber cement products are used in a number of markets, including new residential construction, manufactured housing, repair and remodeling and a variety of commercial and industrial applications. Co. manufactures numerous types of fiber cement products with a variety of patterned profiles and surface finishes for a range of applications, including external siding and soffit lining, internal linings, facades, and floor and tile underlayments.
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