Thank you for standing by, and welcome to the James Hardie Third Quarter 2013 Results Briefing. [Operator Instructions] I must advise you that this conference is being recorded today, the 27th of February, 2013. I would now like to hand the conference over to your first speaker today, Louis Gries, Chief Executive of James Hardie Industries. Please go ahead, Mr. Gries.

All right, thank you. Hi, everybody. We're going to do -- Russell and are in Chicago this afternoon, so I've been told that everyone has the presentation, so we'll try and make sure we refer to what slide we're on and we'll take the same approach as we normally do. I'll kind of do a quick business overview. Russell will go through the financials and we'll come back for questions, so you can drill down on specific areas. So on the cover page, Q3 fiscal year '13 management presentation; the second page, the disclaimer; the third page, telling you what I just said; the fourth page, introducing me, I guess; and the fifth page is the first page of the presentation. So as you can see, a very flat result, very similar to the full 9-month result, so we'll go through that in some detail, as I flip through the rest of the slides. But the $28.8 million obviously is the relevant number compared to the $28 million last year and $113 million and $109 million, so about a 3% improvement, but for all practical purposes, flat. Slide #6, so U.S. and Europe Fibre Cement. Okay, so the flat result obviously is only surprising because of the good volume growth. So we did have a stronger quarter on volume in the third quarter than we had in the first half. The EBIT, down a bit. Price started to flatten out, which we've been kind of indicating that although we are down 2% in the previous comps, the first quarter and the second, we saw that the price should start flattening out and start increasing in future quarters. That's without a price increase, and it is driven a lot by mix. So price is part of the story, a big part…

Thanks, Louis, and good morning to everybody in Australia and hello elsewhere. So looking at the highlights for the both third quarter and for the 9 months year-to-date in terms of earnings, clearly, as Louis has highlighted, there was a bit of a tailwind in terms of sales volume growth, particularly in the U.S., reflecting the improved market environment with volume up 17% for the quarter. Price has been constrained by target penetration into price-sensitive market segments, and that's reflecting all of product mix and geographic mix, as well as an emphasis on the segments at the lower ends of the markets and less mix in the -- or less -- lower proportion of sales into the higher-end products, just because the opportunity is slanted way. We've talked about the funding of the initiatives costing that quite a lot of money and impairing current quarter and current year EBIT margin that, as Louis has indicated, that's likely to swing the other way in future quarters. We have an unfortunate increase in accounting provision for New Zealand, product liability. We first took a charge on that at the March quarter of last year in terms of a provision for future claims that have not yet been identified, as a result of the insurance cover looking as that wasn't going to be adequate. And we took another charge in Q2, which we thought at the time was going to be sufficient to cover the liability. Thus as Q3 unfolded, we saw an increased incidence of claims and also an increased cost per claim expected cost per claim partly as a result of other defendant's showing a propensity for insolvency. So as a result of that, we had to increase the provision in Q3 by $7.5 million. So that's a charge of $13.2…

Thanks, Russell. So we'll go to questions from investors and analysts. So operator, can you do that for us?

[Operator Instructions] Our first question comes from Emily Behncke from Deutsche Bank.

Just a couple of questions. Looking at the 17% volume growth you achieved in the U.S., just wondering if you could give us a sense as to where the share growth has been? Is it more on the new side or more on the R&R side? Secondly, you talked a little bit about expecting better pricing outcomes. I'm wondering if there's anything other than mix in that -- in the better pricing outcomes that you talked about? And just finally, on the cost side, obviously SG&A is up. Is that something that we should expect to stay at those levels? And should we expect any further additions to the staff in the next 12 months or is that largely done?

Okay. On the volume growth, we had pretty good traction on the R&R through the downturn. And I would guess that most of our new share would still be reflecting that traction. So that's -- it's largely against vinyl. As far as new construction, we're just getting kind of resourced and back to newer construction. And in the North, where there's a lot of market share opportunity against vinyl, we don't see the same kind of confidence in the builders that we're targeting that we see in the South. So that's why I think we're picking up more business in the South, and a lot of the big builders in the South and in the West would be more inclined to use Cemplank than one of our higher value brands. So I'd say at this point, we're probably still picking up more from R&R, but we're getting ourselves receptive more fully go after new construction in all the key markets, but that's going to lag some. Pricing outcomes other than mix, well, multifamily -- a lot in the multifamily goes on bid pricing, so we would expect as market demand goes up, those bids will firm up as well, so you would get some improvement there. And then, I think Cemplank in some markets will be not in a position that they'll have to match low ball numbers from direct competition as much as they have over the last 18 months. So -- but I don't think that's anything more than kind of price just drifting up. Like I say, it's not a marketing increase, so to speak. SG&A increases, you'll see some more increases, but not the rate we increased this year. So like I said, the trend lines on revenue increase and the trend lines on SG&A increases, they should kind of cross, so our percent SG&A starts going down rather than up. And -- but I do see some more increases, but not -- just not at the same rate.

Great. So with just -- sorry, back on the pricing side of things, I had heard, I don't know whether this is right, that you moved to more of a market-based price, with discounts being applied with a little bit more discounts of big clients, like the big homebuilders being applied with a little bit more rigor. So I mean, is there some benefit potentially from that?

Well, you mentioned big builders specifically, so we have a very good market share with the big builders -- or category share, sorry. And we've always had like literally every manufacturer of any scale in the U.S. would have builder deals. Now what happened is, you'll recall, I think it's coming up on 3 years ago when we had a market increase, we kind of lost track of some of the category share and we lost it. So in order to recapture that category share and stand kind of on that 35 90 program, we have to go back in. So any time you go back in, you're obviously going to get a lower number than you lost it. So that's part of the problem. I think that part of your problem is not yet behind us, but it's more behind us than in front of us. So the price is lower than it needs to be theoretically in an increasing demand market. So I do think it'll kind of drift up. And then like I say, there's just more Cemplank. So you guys see the numbers and the big builders. They're coming out of the downturn faster than your independent builders or your semi-customs.

All right. And just finally, Home Depot had a very strong results overnight, with comps of 7%. Are you seeing similar demand growth in your repair and remodel business?

We saw a bump on Home Depot comps in our aisle basically. We follow the lumber aisle for siding and the flooring aisle for tile. And they did have a bump, but it wasn't anywhere near 7%. So yes, it certainly had a very good result. And I saw Lowe's came out as well, and they were better than expected. So I do believe R&R will pick up. As far as the major resides, I expect that to pick up as well. So I do expect that market to get better. It just won't get better at the same rate, it's less volatile than new construction, so it didn't go down as far or as fast, and it won't go up as fast or far. But I do expect it'll get better as house values get better. So that equation were pretty big decision for homeowners, so they're going to feel like they're got some investment value attached to it. As far as our business, is to finish, as far as our business with Home Depot and Lowes, it's been pretty solid. So we've been tracking fine in their stores. So we're getting that repair part of it, and it hadn't been an issue at all.

The next question comes from Keith Chau with JPMorgan. Keith Chau - JP Morgan Chase & Co, Research Division: Russell, with just a few quick questions from my end, especially Louis, with respect to the order book, I think in the second quarter results reflected on it, being quite strong and now it's kind of come off a bit. So just wondering if you could provide a little bit more color in that respect and what you expect going into FY '14? And maybe just a couple of quick ones for Russell, firstly, CapEx for the full year. Are you able to provide a bit of guidance on that? And lastly, either Russell or Louis, market and category share, where does that company sit at the moment?

Okay. Yes, the order file, I kind of think it's just kind of normal variance to be honest with you, because I think the market activity is fairly good. There's absolutely nothing that leads me to believe it's not. So at least, you remind me I was right in the third quarter, because we were pretty solid in November when we finished up the quarter up 17%, which was a little stronger than we anticipated going into the quarter. Now I would say we're a little bit behind what we anticipated going into the quarter. But normally, it's just a matter of when -- and you got to remember, we had an early season last year, and I don't think we're having an early season this year. So I don't consider it a problem, but I think our forecast for the fourth quarter volume-wise was higher than right now. It looks like we're going to come in. Now, game's not over yet. There's actually still enough time between now and April 1 to where, if things picked up, we could hit our forecast. But it just doesn't -- I'm just not that confident. As far as -- yes, I'll take the market share, category share, because it kind of relates. As far as thinking, well, maybe vinyl's not growing, I mean not declining or maybe competitive fibre cement is taking more of our business or maybe LPs had a spike in demand. I don't see any of that. So I don't believe any of that is what the -- is affecting our order file. I just think there is just a little dropoff in activity in the market for our product right now. And just like in the fourth quarter, when we were 3 percentage points or so higher than…

Sorry, we didn't take your capital question.

Okay. Keith, on capital, it's hard to get a handle on exactly where this might finish up. But my guess would be that we'll probably be about $60 million for the full year because it just depends on the timing of payments to suppliers and we're in the middle of some fairly hefty planning in relation to future plant developments. Keith Chau - JP Morgan Chase & Co, Research Division: Okay, Russell. And that Fontana CapEx, is it likely to happen in first half of FY '14?

Well, it will get spread out over a full 12-month period in all likelihood. So it will be pretty evenly spread through to the period.

The next question comes from Andrew Johnston from CLSA.

Couple of questions. First off, if we can go back to where your volumes or volume are tracking on. I'm interested in identifying whether you're seeing homebuilders looking to build much cheaper houses and also, look at the geographic differences in relation to that. I refer back to Boral's comments in their result that they were seeing builders looking to use products cheaper than bricks. And so their volume growth was much lower than what single-family growth was. And if you can comment on that in relation to what you're seeing and perhaps are your -- is Cemplank perhaps picking up some of the brick markets in the South?

Okay. So I'm going to talk about it more conceptually than maybe Boral did pointing to their numbers, because I don't think you can -- I don't think you should worry about it in our numbers. There's a lot of things we can do that would overwhelm any kind of a trend we have toward different type of homes. But basically, I think the reality is when the building industry was very hot, everyone could afford whatever they wanted. The builders kind of -- like I said before, their bottleneck was they could sell homes easily. There was a lot of demand. So the bottleneck was how fast can I build a home or how many homes can I build based on the land that I have available. So a lot of their optimizing and profitability went into bigger and better, and then pricing that up at a higher average margin than the overall house. So when we went into a downturn, then obviously it flipped the other way all of a sudden, their cost of construction as prices start diving, their cost -- because affordability went down, the cost of construction was higher than the prices they were selling at. So then they had to go through that whole process of getting cost out, so that when they did sell a home, they ended up with more cash than if they didn't sell a home. And that, I've described it before, there's kind of 3 processes. The first thing they do is they go to the vendor and try and get price concessions. The second thing they do is they -- what they call value engineer, which means they defeature and they pull any cost out of the home that the homeowner's not aware of, meaning it's not easy…

Okay. I mean, given your comments about Cemplank, prices come off over the last couple of years and you're selling more of it, perhaps -- is it perhaps not surprising that your average price has held up as well as it has?

I wouldn't go that far. We're still not at the terminal share at Cemplank that we forecast that it would end up at it at over -- I think it was about 5 years ago first time we published our product mix shift kind of graphs or bar charts. But it did -- it was on a steady path, and then it spiked and it's starting to settle down. So that's somewhat due to what we did, meaning we lost our category share. And when I say we lose category share, I don't think what anyone would think, well, we went from 90 to 50. We -- in some market segments, we did get below where we think we need to be. So some of it was created by that mistake and then some of it was just created by the market realities. I mean, holding a brand in the market at the same positioning for a 20-year period is fairly challenging. So there's a natural erosion of brand value. And then as that happens, brands like Cemplank that have an opportunity to grow their piece of the market. Now I don't want to mislead anyone. We're not far off the percentages we talked about in September. So this isn't like a quick switch by everyone in the market from Hardie to Cemplank. The reality for us is, and obviously we invested with our R&D, we got to keep building more value into the Hardie brand and that's the best way to slow or stop the cannibalization at the Hardie brand by Cemplank or any other basic commodity fibre cement.

Okay. And Louis, just with the renewed focus on financial targets and your comment there about things continue as they are, you expect to get about 20%. What does that actually mean in terms of how you provide KPIs and provide guidance and direction for your business managers? And is there any change in focus in terms of whether you'll pull back from pursuing some markets as hard as what you have been, just to ensure that you actually do hit those financial targets?

Yes. So like I said, the thing I like about Hardie is we've been able to stay on strategy in any kind of market. And so, I definitely don't want to panic and say, "Well, I'm not going to deliver that kind of result again." I got to get that number, and it doesn't matter how I get it. It matters a ton how I get it. I just feel we can get there the right way. Probably, I feel like that's a little aggressive, getting ready for the market share growth. And so, it's a little bit more of a correction than I would like to make. But it's not moving off what we're doing. So that's the first thing I want to make sure I point out. And as far as pulling out of some markets or de-emphasizing some markets, the thing we think about every day and we need to continue to think is, like I say, it's a lot tougher challenges at 35 90 . So is it expensive to go into Non-Metro markets relative to Metro markets? Yes, they're no doubt it's expensive. But you just can't be 35 90 if you don't sell in the smaller markets. So most product categories use kind of distribution to sell in those markets. They just don't do market development. They sell the market standards. They don't have the returns in our product to go actually do the hard work to change the standard from whatever it is, a chipboard siding or a vinyl siding to Hardie. They just can't do it, so we've got to do it. Now having said that, there's been some market initiatives that haven't worked. So we've tried to go with color in the new construction southern markets and basically switched from Hardie…

Okay, that's great. And perhaps one last question for Russell. Can you just clarify the change in guidance? Am I right in looking at the new guidance, actually include some one-offs in that guidance as well? I think it was about $7.7 million of additional one-offs that's embedded in that guidance.

Are you referring to the foreign exchange gain and -- which we reported in Q1 on the cost recovery from Q2?

Oh, so they're already -- they're not needed this quarter then.

No, they're not needed this quarter. They were there in Q2 when we gave the guidance of $140 million to $150 million.

The next question is from Simon Thackray with Nomura Group.

Just going back a second, we talked about a couple of lines obviously coming along. You got Fontana -- CapEx in Fontana. Can you just remind us in terms of where the line opportunities are from here in terms of which lines gets switched on or where we're going to see the scheduling, if you like, of existing lines returning and new lines coming on, just so we get a feel for the ongoing level of investment during this period of recovery in bringing capacity back on?

Yes. Again, so actually Waxahachie 1, like I said, we were just starting that just a couple weeks ago. Fontana 1 and 2 will come on probably in January. Summerville, we're doing some preliminary work there. The plant was designed to make siding. It's a good-sized machine to make HardieBacker, but we haven't proven that the machine can make HardieBacker. So we're spending some money to kind of run trials this year to prove that out. Because it is -- it's a higher-value asset, if we make HardieBacker there in the siding. We have XLD -- or NT3, sorry, Trim north, which is basically incremental capacity at the existing site. And then the next thing we have is -- that's pretty much laid out, and we haven't got the permits and everything. But it's a third sheet machine in Texas, where we took the Trim line out of that plant during the downturn.

Cleveland.

Oh sorry, Cleveland, yes. So that plant has raw material and finishing capacity and good demand. So it's kind of a perfect place to put a sheet machine in, because you get the other stuff for free. And then after all that -- that's the 2- to 3-year look. And then beyond that, next to evaluate is a third line in Peru, a third line in Pulaski, a second line in Tacoma and a fourth line in Plant City. So the theme you're getting here is we're going to do a lot of investment on our sites before -- at least, at this point, it looks like we're going to do a lot of investment on our site for additional capacity before we move off to another greenfield. So we don't see -- there's some opportunity mid-South and Northeast. There's opportunities for freight advantages. But at this point, it's looking like the incremental cost advantage of putting the line in the existing site, especially when you can use either raw material or finishing capacity that already exists outweighs the kind of shipping radius benefit we might get from a greenfield. And then of course, we got the Australian capacity, which we do need more capacity in Australia. We worked on a greenfield. We do have a greenfield option. It's too expensive. So we're working on brownfield alternatives right now, and we haven't quite gotten there. But I would believe that we're going to have a good brownfield solution in Australia for the extra capacity we need the sports guy on.

Okay. Just with those incremental costs and obviously the ramp-up in supply-chain costs, in particular, during the quarter, you make the point that revenues and ultimately profitability should now start to rise faster than costs and you'd be targeting margins in excess of 20%. Can I just get some clarification on the time frame? Just looking at the trajectory as we're moving through the fourth quarter, in terms of what your current look is at the cycle, whether that margin expectation starts in Q1 of '14 or Q2? Or is it a year-end target? Just to give us a bit of a sense on what you're sort of planning allows for?

Yes. I mean, it's a great question. And I'll be the first to tell you, it's not going to be as exact as I'd like it to be. But we won't hit 20% this quarter. I can tell you that. I know you like certainties, so there's some certainty for you. But yes, I believe we're in the game for next year. But it's hard to hit 20% for the year. And when we say over 20%, we're talking annual. It's hard to hit 20% for the year with the winter seasonal downturn we have in the U.S. without getting out of the chute pretty good in that first and second quarters. So if you don't have a good position at half year, you can't pull it out in the second half. So I mean, it's a forecast. But I think we can hit 20%. And that means I think we need some 20-pluses in the first 2 quarters. And if we get them, then I like our chances. And if we don't, then it's going to be delayed a little bit. But the big thing is, and I know this is a little tough for everyone to kind of figure out, the big thing I want to communicate is we made a choice to kind of ramp up spending to get ready for growth. And we're just a little bit wrong in some of our pricing and cost forecast. But it's not a problem balancing the financials with the growth. We just came up short on what our forecasts were -- I mean, our cost adds were about what we expected. But obviously, those are very easy to control. So -- and the volume, by the way, is about what we expected, which is not as easy to control. So we just missed it on the price. I said flat, plus or minus 2, and I was thinking flat. And we're definitely going to be down. And then some of the cost issues of bringing up the capacity and stuff like that, I mean, we just got -- we're just a little aggressive with our forecast. I have been kind of surprised, Simon. You're living in a down market, you hate it. You're doing well, but you're just waiting for that good market. And I thought the organization would just put the switch and be ready to go. And quite honestly, it's -- there's more getting ready for operating well in a better market than I would have anticipated. And it's probably a mistake. We're one of the few companies that took the extras out, so you got to build it back in. So it shouldn't be that big of a surprise what hindsight is not a guess. But -- so anyway, we'll be shooting for it next year. If we don't hit it, you'll know we miss it because we couldn't do it, not because we weren't trying to do.

That point taken, Lou. And while we're talking about margins, and I guess long-term strategy targets, 35 90, the cost of defending and achieving those targets, when you're the clear market leader, is obviously greater. And you can't really fractionalize your cost across to your competitors, like what are the benefit you give to the category. Just thinking longer term on -- can you give us some color on what you're seeing with the competitors and their activity? And then importantly, I mean, is there any opportunity, quite frankly, for something like toll manufacturing for competitors, if they can't do the job in the category?

Yes. Those are all things that, I would say, we would consider just like anyone else would think about. I would have to tell you, there's not many manufacturers that want to depend on someone else for their supplies. So I wouldn't think any of our existing -- I wouldn't think any of our existing competitors would think toll manufacturing from Hardie is a sustainable business for them. And the other thing is I can't see where we would make more on toll manufacturing than we would on Cemplank. So I don't want to mislead anyone there either. We make not only financial returns on Cemplank, we make economic returns on Cemplank. So it's not like we're just defending a position by having some kind of a loss figure out there. That's not what we're doing. It just the middle of our -- I think I said end of September, the middle of our product line returns better than both the top and the bottom, and the reality is we got to build more in the middle. Because we need to invest more on the top, so we need to build more in the middle, so we can use that return to get out in the middle to invest in the top. And defending the bottom, and the other thing I need to tell you is our competitors, they're just running a business just like everyone else. They didn't do anything wrong. We made the mistake. They didn't make the mistake. They just benefited from our mistake.

Okay, got it. And just on the homebuilders, I know there's been a couple of questions on it. I just want to clarify something. The pricing for the major homebuilders, and you talked about defeaturing the product and obviously trying to take advantage of the lower prices. But just in terms of your arrangement with those margins, are there sort of price escalators in the contractual arrangements you have with those guys in terms of price? I mean, we shouldn't be expecting that prices are flat forever with these major homebuilders during this upturn, should we?

So I would agree with that. The agreements would vary, but a normal agreement will have price protection for a period of time. So if the market price goes up, they might get a lag of x number of days or to a certain date. So basically, what they're trying to do, and they do it with all their categories, not just us, they're trying to make sure when they got a house, they're selling for $200,000 that they have price protection up through the completion of that project. So they know that their costs aren't go up because of vendor increases while they're building that house. So some of them run through again the calendar year. That's pretty typical, and then others have like a 3- or 4-month lag time. So they're structured differently. But yes, there's no reason to believe that, that segment would always be at the price it's at. But I think there is good reason to believe that large homebuilders with volume and professional purchasing organizations and the price sensitivity of their business model, they're always going to be below the market, whether it's -- -- whether they're buying siding, plumbing, insulation, roofing, it doesn't matter. They're always going to be below the market.

Okay, that's clear. And then one really quick one for Russell. The buyback, again, Russell said -- can you just talk us through? I know you're saying we get 150 next year in dividends, if nothing ends in the buyback. But the rationale for them not being active?

Well, the rationale, Simon, is pretty straightforward. Because this is all about returning funds to shareholders, and we have options. We either to do a share buyback or we do dividends. So it could be a mix. But we're not driven to a share buyback because of any sort of capital structure reason, and we'd be driven to a share buyback because it's a very attractive option relative to returning funds to shareholders by way of a dividend. And we don't get distracted by franking credits because we can't frank our dividends to Australian shareholders, and a capital return currently isn't a significant prospect for Hardie, given our Irish structure. So it's pretty straightforward. We're just looking to the better way of returning funds to shareholders. And if we perceive that, that's a share buyback, it'll be driven there by value. If it's not there, we will return funds to shareholders via dividend.

The next question comes from Guy Bunce with Citigroup.

2 issues that I want to ask. First of all, in relation to U.S. sale mix and the impact on price. Can you just clarify even with a rough estimate, what percentage of sales would be going into the multi-family and starter home market?

The multi-family is an easier one to answer, because I can point you in the direction. Our multi-family market share would be similar or a little better than single-family. So I can't remember what multi-family is up to now, 24% or something. Well, you got to realize this multi-family usage is -- I'm giving you a rough -- you guys can go get the right numbers. I'm just giving you a rough stuff. About 1/2 the usage per multi-family unit versus single-family unit of the type of multi-family we sell. So you can see, as the single-family shifts to multi-family, say it's gone from being 15 multi-family -- I mean, yes, 15 multi-family, to say 25 as an example. So -- I mean basically, our opportunity on those starts get cut in half. But our likelihood of getting the business doesn't change very much, okay? Now the likelihood of that being a Cemplank brand versus a Hardie brand, depends on where you're at. So if it's in a color market, obviously, it's going to be a Hardie brand. But if it's in the South, they would more likely be a Cemplank brand. In the West, it's kind of like 50-50. Some of the builders of multi-family prefer the Hardie product mix and some go for Cemplank. As far as starter homes, I don't have a good estimate. Our good penetration of starter homes is in Texas, and we're a little bit overweight Texas right now, meaning the Texas market is doing better than markets in general. So that's how we'd be kind of up on the starter homes. Because it's more of a geographic thing rather than across the board. Because in the North, we don't get starter homes. So vinyl gets starter homes in the North and the mid-Atlantic.…

The -- you made a comment along the lines of, you get 1/2 the usage in multi-family. Is that referring to the revenue per square meter versus single-family? Is that what you're referring to?

No, that's how much volume goes in the house. So a single-family house, rough estimate is 2,500 square feet is the opportunity. In a multi-family, it's more like 1,400 square feet. So it's actually a loss of opportunity. It goes back to that early question about when Laurel was talking about defeaturing buildings. Well, the #1 way to defeature a building is make it smaller. The easiest way to make a home smaller is put it up against something else. So they're sharing walls -- they're sharing interior walls, so they don't need as many exterior walls basically.

Yes. So these trends, obviously, we think as we come out of the downturn and the recovery accelerates that the mix will change back to more traditional single-family. But are you actually seeing that evidence in your business today?

No, it's too -- it's way too early. And by the way, I think there's 2 factors. You can go over -- you can go through previous downturns and kind of see that. So come out of the downturn, everyone's concerned about affordability. They go towards more multi-family and then it kind of wears off as the recovery goes on. But I think the other thing we're dealing with in the U.S., and you see a lot with the housing stock, it never really did get absorbed even though the market's getting better. And that's they were building too far out of city center. So Riverside, California; Elgin, Illinois markets like that were being developed single-family. And I think it's unlikely that those ever become boom markets again. So if you're going to go closer to city centers, you're probably going to have less time to do it, so you're probably going to be more inclined to multi-family. Seeing that you're going to have a higher percentage of multi-family. So now, I don't think it's changed the business-type trend. I think it's like a 20- or 30-year trend. What we're seeing now is more of the impact of the downturn. But if it's at the top of the market, we were 15% multi-family. And any good forecaster is a lot smarter than me on this. I would say the top of the market, next time, you might have 18% multi-family. If that market down after that, next recovery you might have 21%. Okay, and I think that's more about radius to the city or the commute than it is around -- than it is about the affordability fundamentally changing in the U.S. And then you're just going to be closer, and being closer means you have less land. Having less land means you're going to have 0 lot lines, which we have a lot of or you're going to put a few things together, a few walls together to make better use of the land.

Yes, great. And secondly, just getting back to this issue around the margin that Simon was talking about, can you give us some sort of assessment as to the underlying assumptions behind that? In other words, what do you think would be required to see those U.S. margins back above 20% in the first and second quarter? What sort of revenue growth, for example, would we need to see?

I think our revenue growth is fine. I think our volume growth is fine. I think our price has to start being slightly up or slightly down. I think our unit cost -- delivered unit cost has to be heading down. And then I think our organization process increases have to start tapering off. So you don't have a silver bullet. It's not like a commodity business where you've been running a loss and your costs are going to stay the same, and you're going to raise your price forecast between now and September. So we're not in that kind of business. So you got to kind of do it on all sides. So if those 4 things I said would actually happened this year, we probably would've made it this year. We kind of had enough volume, given the gain this year. Be we decided to spend some of it on the market share funding. But -- so we don't need a miracle. We just need pretty good management around the optimization process, not only around the growth side. So partly, you're going to have to manage better next year than they did this year, and that starts with me. So...

But it's not like you're suggesting that price needs to increase materially locally significantly, staying at 5% to 10% in order to achieve that sort of margin expansion. It's a culmination of those factors.

No, I mean you can do that overnight and get back in your range. But I do feel that's a trade-off. I don't think the market's looking for an increase from Hardie right now. We're looking for conversions in the market. So I don't want -- yes, so I don't want people worrying about what the price of Hardie is when they're trying to decide whether they're going to come off vinyl or come off chipboard. I want them kind of feeling that Hardie has a stable pricing policy, unlike the commodity price, which we do. We've always valued price. We didn't go down in the downturn. We'd be one of the few, if not the only company, that didn't go down in the downturn. And we just can't -- because we're not in a range we want to be in. We just can't deal with the price increase. I mean we could, but it won't be the right way to do it.

Your next question comes from Liam Farlow with Macquarie.

Just a couple of questions for me, most have been answered. But firstly, you've spoken previously last year around transport cost in the U.S. Are you seeing that input costs moderate into this year? And secondly, could you just give us a bit more of a detailed rundown on what you see in Australia at the moment?

Okay. Input costs have been falling, and there's no trend starting. It looks like it's going the other way. So I think we'll take more full advantage of it next year than we did this year. But right now, things look okay. That goes for freight as well. As far as Australia -- as far as the market -- is the question about the market?

Yes, that's right.

Yes, so you've asked the wrong guy. I'll see if my Australian friend here has a comment.

Well, clearly, you and I have visibility in the Australian market. But we didn't spend a lot of time in it. The anecdotes that I picked up from talking to guys is it's a pretty challenging time, a lot of uncertainty, lack of consumer confidence. But that there may be some recovery on the horizon, given the reduced interest rates. But it's a pretty competitive market at the moment, relative to more buoyant times, particularly in the non-Scyon brands for us.

So I think you know Mark Fisher. So he takes care of non-U.S., and the guidance discussions we would have would be, we don't know what's going to happen with the markets so let's plan like it's going to be a poor market, run our business that way. And then if it gets better, we'll react. So we're kind of very simple-minded at Hardie. We don't think anyone knows what the Australian market's going to do. So let's just assume that it's going to kind of go as it is. I don't think anyone is talking about it falling out of a cliff. So let's assume that's going to kind of stay tough. We'll get our numbers in a tough market. We'll grow that Scyon share in a tough market. We'll hold our core product share in a tough market, even if it's more price competitive. And then if it's that better, we'll just ramp up. So yes, we don't have good insight. And even the guys in the business, we discourage them -- we discourage if they're guessing what the markets are going to be and placing their bets accordingly. We'd rather have a very conservative approach, whether we think we know the market will be at least, and then we're kind of set up for that.

[Operator Instructions] Gentlemen, we're showing no further questions.

All right. Thanks for everyone's questions, and I hope we kind of gave you the insight you're looking for. And look forward seeing you guys in May. Thank you. See you.

That does conclude our conference for today. Thank you for participating. You may now disconnect your lines.