Good morning everybody. Walk you through the result as we usually do. I'll give you a really quick overview and then Matt will walk through the financials and we've got a Q&A. So we've got our disclosure pages and some on page eight. So as you can see as you would expect most of the euros are pointing up. We talk a little bit about the EBIT margin on the next slide. Basically the markets pretty good and the market side of our business has been doing all right we've struggled a bit on the operations side as we've talked about a couple of times now. So we will talk through that some more. Just looking at the bullet points there. We did get higher volume so we’re positive no a market index. Even margins at 25.5 which is above the range but quite honestly it shouldn't be about that based on where we're at with the market. So we will talk about that and then you get your cash flow of Summerville capacity. So we are in free and non-capacity mode again in the U.S. or so we will no doubt cover that either on one of the slides or certainly in more detail before we get into Q&A and get the dividend comment there. So if you go to North America you see 12% up on the quarter and 14% on a half year and the problem is we could ship everything we had orders for in the second quarter. So our manufacturing continues to restrict supply. It restricted somewhat in the first quarter but we had some inventory we could use to work-off of time, by the time we get to second quarter we don't have much inventory to work off. So you're basically saying we shipped…

Good morning. I will take everyone through the financials similar set sort of charges to what we normally do. So for the second quarter we had sales of almost $96 million of about 10% volumes are up and most of the businesses average net sales price in the international fiber cement segment was up a reported 10 for the quarter but there are some FX in there so the underlying price was up more like five, some of that was mix and some of that was price increases in Australia and then just quarter normal pricing in New Zealand the Philippines. Gross profit increased 10% so in line with net sales most of that lack of leverage if you will is what mentioned earlier with respect to the production inefficiencies in the U.S. SG&A expenses increased about 10, so they were up again in the second quarter not as much as they were in the first quarter I think we said in August that the first quarter was probably the toughest comp from an SG&A perspectives and had the biggest year-over-year increase and you can see that starting to come down as we go through the year we'd expect that to start to level off of it or continue to invest in the business. So they won't go flat but it just won't be as quite of a steep incline. So those investments are mainly in sales and marketing I say in almost all the businesses and not just the U.S. but also in Australia and New Zealand it's hoping business as well as continuing to add organizational capability at a corporate level to support the growth initiatives. Operating profit on a reported basis $57 million down 56% but that's obviously got a number of adjustments in it like a…

It's Emily Smith from Deutsche Bank, so just a couple of questions around the capacity ramp up in the costs associated with that. I know you mentioned that the main reason for the change but so what you kind of had that some increase in capacity sort of in your plans. So what's changed between now and say even a month or two ago in the U.S. Secondly, I think Matt, when you were talking about the startup costs you didn't mention Plant City Three which I thought was also coming on line in Q4, is that still the case? Okay, and just finally I guess when you look at that profile around additional capacity that’s been added that’s really only capacity coming on line in Q1 I think according to your timeline. So is it fair to say that FY ‘17 is going to be the worst in terms of cost risk and I guess overlying that potentially with a price increase in March 2017 is that still on the cards? Thanks.

I will shift the question a little bit because the question was on startup cost. I think most it -- most of the questions are probably about our EBIT margin which I think we talked about this a bit in September but we clearly had our equation for capacity wrong for a category that's so much -- with was a big share. So we didn't have enough insurance in our capacity utilization equation. What happened is then we did start growing a little bit more in the market but the plant started to perform below expectations and what that's triggered is four things really, we’re growing up startup cost forward, we’re having higher freight cost because we’re throughput optimizing so we're going with a plan, with the machines to determine where products are made rather than closest to the market. We have a higher unit cost because we are trying to throughout optimized so we have when you think of unit cost it has an numerator which is what you spend and the denominator which is how much you make and our focus is to spend more on the numerator to get the incremental board out of the plant which doesn't result in more unit cost but it does result in higher throughput and a better situation for our customers. And the other thing is we're restricting shipments. So we got some volume that we didn’t ship that we could have and should have shipped. So that's kind of a story of the EBIT margin is set for part equation and it all started with the planning by the supply chain and where our capacity utilization need to be and how quickly bring up capacity and then it was made much worse by the fact that our current network of…

Can I just follow up why you're restricting shipments?

We are shipping what we're making, it's just being restricted by the [indiscernible] production.

Peter Steyn from Macquarie. Louis could you comment on how you are seeing the markets, Matt made some comments in his closing remarks around the market but are you comfortable now having gone into the election and then out of the election on the other side, how are you reading the market? Is there any signs that particularly worry you going into calendar '17 and beyond that makes you uncomfortable that the market may have changed?

The short answer is no, the market has been good for us. It's been kind of slow steady recovery for several years now which since we're a company that tries to grow market share that's the ideal situation of the market share. So we like where the market is at. I would have a clue and I don't think anyone else would have a clue as far as if there's going to be an election impact on housing market. We're not planning for one. So if we get a positive bump I've to be ready to take care of that and if we get a little bit of a negative drag on housing market we will adjust to that but we're not expecting any real significant change in what we are seeing in the market which is slow steady improvement.

And then maybe just changing back on working capital, could you comment on how you see the progression in inventory trends over the next number of quarters? You're obviously short right now. You were planning to rent that up into the next quarter, how do you see over that coming out fee from a cash flow point of view?

It's a good question. I guess the thing we want to clarify is the reduction in the inventory was not a plan it was out of necessity to service as much demand as we could so we pulled our inventories down. So we will bring them back up. We always bring them up in winter, but this time next year you will see higher inventories that we have currently just because we don't expect to be sure about capacity at that point.

And you don't see [indiscernible] side, two questions following on net market question though, your numbers tracking well above market sort of [indiscernible] orders which have also been well above market, their lives result are only -- the order growth was only 3%. Is that significant and why you're looking at the market or is that just you think that's been discussed?

I mean when your data gets smaller and smaller and now you’re on one build for the quarter, your variance just gets bigger. So I think Horton's you know kind of doing well in the market and if they had a kind of soft comp I think that just reflects where they are at that particular quarter versus the previous I don't think it reflects anything on our housing market. I think if you put all the big billings together you see they're taking a little bit more share as we go through the recovery and their growth looks pretty good. Remember we just want an increase in market we don't we don't actually want to strongly increasing market. So we've been living with whatever spend 5 to 10 or 11 for three, four years. It's a perfect market I would think it's a perfect market to grow market share and looking back we probably should have grown also we’re focused on making sure we get another two, three years of steady increases. We're going to work hard to grow more share than we have.

You [indiscernible] 10% market depending where it is and clearly a sign you could have actually shipped more had you had more to ship. So you know might be the question but I'm just thinking who's taking the stuff that you're not shipping?

Obviously some of this can be in deferred they're waiting for us. We got the seasonal downturn happening. So we're now for the first time in the last several weeks we're actually producing more than we’re getting orders for so we are starting a play little catch up now. So a good amount of our shortage hopefully we can get back in the slower months. The rest of it people that had to go on and build their house and couldn't our material, I would say that would be some conversions from mine or they deferred conversion. They made a commitment to go to [indiscernible] and because product availability was tight. You know they pushed it back and as you guys know our most closest alternatives are CFC and LP. CFC I don't think has a lot of capacity to deal with so if anyone picked up directly from us it would have been [indiscernible], their close alternative that has capacity.

Just on the Philippines, the imported product is that a [indiscernible] or?

It is [indiscernible].

Keith Chau from JPMorgan. Just a quick question relating to couple of comments from September to around your recruitment drive. I think you mentioned that is a few heads to the allocated or acquitted to the Global Management Team including HR International and sales. How far processed are you in that process? And do you think allocation or appointment of the Head of HR will actually help you just configure the operation of the way where we have some of these issues or it will help you plan the bit of the [indiscernible] of 35-90?

So the quick update is we're at the very end of HR search. We make announcements there shortly. I don't know if we will announce it publicly but we will internally and then with Head of Sales and Marketing and Head of International we're at the very beginning of the searches. So in that respect three to six months for those searches and then whenever we bring on someone senior we have a pretty long onboarding. So even if the HR -- Head of HR will join in January and they wouldn’t be fully in the job till May or June. So to go through and learn the business period that’s fairly long. We've have bridge organizations in place to kind of your question why you’re doing this, are you doing it for 35-90, the answer is absolutely. On the org side, on the HR side you guys admit, a lot of guys admit, we got really good people but our depth isn't what it needs to be. So you also know part of the reason the depth isn't what it used to be or it needs to be is because we're kind of reluctant in the past to recruit externally at a very senior level and all, we prefer people really in their career when we recruit them and then our turnover is running above our targets. So put those two things together we’re short of depth that gets in the way of running initiatives, slows down things whether it be on the operation side or the margin side. So there's just a bit of shifting with our organizational strategy that enables our 35-90 that needs to happen and we've gone for a Chair Executive and that we think can provide the leadership we need in that area. Head of Sales and Head of International is really just build a more depth on the GMT. So once you guys know Fisher, he takes care of international and international as you've seen from our results runs pretty well. The Head of International is more about what's the growth potential for Hardie outside of the U.S. in fiber cement, then it is about running the Asia-PAC business. We got a got organization in Australia that runs Asia-PAC business and now continue to have that responsibility so the Head of International is more of a longer term strategic position similar to none we have seen which Fisher as he gives up international non-CFC [ph] growth which we think is important five to seven years out and probably the fiber cement outside of US is important more like maybe seven or 12 years out. We do think there's an opportunity to think about fiber cement and some of the geographies and when we start doing work.

It's [indiscernible] from UBS. Just can you get a bit more color on PDG and I guess the regional mix and how you did in the various regions?

I think what's been disappointing to us is our overall growth especially [indiscernible] is fine if we would add up capacity you're probably looking at PDG very close to our target if not right on our target. We're not running our full game up in the final markets. So we get LP in some of those markets and obviously most of the vinyl's mid-Atlantic North East, Midwest and Canada, Eastern Canada mainly and we've done all right in the markets but we're just not as laser focused on vinyl's we need to be so that's one of the things we're trying to change in the business. On the other hand you know kind of the more fiber cement markets or the kind of hardboard wood type markets in the mountains. We've done well and we've done well when our growth initiatives and knows they are a little bit simpler, simpler game plans to run, but we run them well. We haven't run the vinyl game plan as well as we should.

And just follow up on Andrew's question around the deferred shipments. Are you able to maybe quantify what those were in the second quarter up?

I'm sure we have an exact number in the company but basically what I try to indicate is we’re 14.5 in 12, maybe 15 for the year instead of 14 and probably 14 for the quarter. So second quarter demand looks very similar to first quarter demand like I said in the first quarter we able to ship down and use some inventory and ship extra board that we didn’t produce, second quarter we're kind at the point where we had no excess inventory to ship so we are just shipping what we're producing. And I think everyone who knows the business knows the exteriors run at a higher rate than the interiors. So those will be higher numbers for exterior.

The first phone question comes from Simon Thackray from Citi. Please go ahead.

I just get to understanding the guidance, I took your point about what's been implied in terms of capacity additions and taking those cost to double line etcetera but I'm just trying to understand it, based on the guidance you told me about the split between 53% first half or 58% first half what you're talking to into second half? Historically your revenues reasonably balanced half on half, call it 51 or 52 and your profitability for this first half at 15% impact on sales is the highest it has ever been but just can you get me through where -- what's the total impact that you’re expecting in that guidance of 250 to 270 from a $1 perspective and exactly where it comes from?

I think the purpose of the range is not to provide an exact number. So I mean I will try to give you some sense though Simon help -- why do we guide down. So I think in the earlier part of the year we obviously weren't anticipating that there would be some incremental cost to the normal run rate in the business related to startup, few things that sort of changed in the last few months. So one is we're going to startup more so we’re pulling some of the startup forward and then two we’re trying to go quicker with the startups and that is inherently more inefficient. So I think we may made a comment in the August call that startup costs were kind of mid-single digits and they will be above call it $10 million, $11 million now for the year just in the U.S. So with Summerville, Cleburne-3, Plant City 3, Plant City 4 and getting both lines in Fontana up and running. We've got five startups now kind of running and we're trying to do that concurrently and it's a bit of a double edged sword in the sense that if it doesn't run well obviously there's waste and that costs us and when it does run well you get higher unit cost per board that you end up shipping so you know the startup kind of adds incremental cost both ways in that regard. There was one factor in the way we thought about guidance this time versus what we thought about in August. The second is in August we weren’t anticipating that we weren’t going be able to fulfill all the orders to the extent that's played out over the last couple of months and so when you leave orders unshipped obviously that changes the volume forecast for the year and then obviously that has an impact on the earnings we’re going to play out for the year. So a combination of those two factors is really what drove the adjustment from where we were on guidance in August to the guidance that we’re providing today.

So I would like to assume that that’s going to be the second half will have a much weaker EBIT margin performance on that basis?

Compared to a year ago I think that’s probably pretty safe assumption.

I'm just trying to understand that the acceleration, the five plant launch when we were in Charleston in September the discussion was around having allocated the A-team [ph] to the startups and leading the existing manufacturing businesses to their own devices and net of cost in terms of operational performance and that strategy was going to be reversed I think from memory you were bringing your A-team back on to the line to make sure the existing network would be operating effectively, but we were anticipating that the might go down [indiscernible]. So had some in terms between September and now or that’s completely misinterpreted that.

I think we need to go back to the headline. Manufacturing has been more of a problem and a longer problem than we're anticipating in the summer. I guess the best way to describe it is in the summer we thought we were getting kind of lot of normal variance and then some things we got to fix in those two plants. The reality is we had few issues across the network pretty much across the network, I would say in a couple plants that need to be addressed and we backed up and addressed that. So we got behind on some things we shouldn't have got behind on. It's resulted in some excessive downtime in several plants in the U.S. As far as the startups probably the biggest change between when we talked at length in September and now is we live with the problem we have this year long enough to say we just got to push through this thing make sure everything's exactly like it needs to be going in the next year and we're more aggressively bringing the startups forward. And as Matt said and I alluded to earlier, the way the Cleburne startup which has been set up like we had talked in September they're doing very well, firewalling the startup from the existing lines. We started to make board on the new line and the efficiencies and existing lines had not fallen off like they did at Plant City and Carole Park. So that little part of the thing initially thing has worked well, but bringing all these startups forward and like we commented if the startups go really well you just put more board in the system at higher cost, if the startups go poorly which we don't anticipate or don't have any indicators that they will you know you have a lot of waste. So it's just—we're just being really aggressive internally to get all of our available capacity started up and producing board and that’s pulling cost forward. If you look at two years, clearly our EBIT margins would be better this year if we weren’t fighting this problem but last year we shouldn't have deferred startups if we had to write equation we went to deferred startups and we weren’t paid for some of those startups last year. So it's just -- there's some areas in our planning there but it's more timing and it is absolute dollars there or even double [ph].

And you said it's two to three quarters before you get back to your expected manufacturing guidance or operational targets presumably for fiscal '18 because you need -- how fast can you grow and not get caught by the market?

I think we can grow 20% and not have supply problems and we don't anticipate the market being more on an index say about 6 to 8 so 20 is a plenty headroom. And as far as a two or three quarters to get where we want to be in manufacturing. Obviously when you’re run into a problem like this you do a lot of work to understand what drove it. We found some drivers we didn't like so like I said we backed up kind of changed our approach in a few important areas. So I do think you know there's a bit of a real learning going on at Hardie, it takes two or three quarters to get there but I like where organizational thinking is going and I'm starting to like to see the trend lines as well. So I think we’re good but it probably does take two, three quarters before we're happy.

The next question comes from James Rutledge from Morgan Stanley. Please go ahead.

Just following on I guess from Simon's question in terms of how we’re thinking about fiscal '18. I guess you've talked about some of those one off costs embedded in your guidance for fiscal '17 coming out and then getting the manufacturing efficiencies. I guess that combined with price and a reasonably strong volume environment would take you well above the 25% margin top end of the range. How should we think if you’re thinking about that kind of investment, does that restart SG&A investment or is it something else that I'm missing there?

As you know we don't guide forward into the next year but if you listen to my story you got all the points, right. I think we hit the bottom in manufacturing this year so we will have better numbers next year. We'll have a market price increase, I think our capital pricing will be the same or little better. We're not anticipating a bigger than normal meaning our trend line and SG&A build and we expect to grow above the market index and it's supposed to be a market that might be up index wise around 6% or 7%. So yes if you read all those comments we should be looking for a nice financial kick up next year which we didn't get this year. Obviously we're going on the wrong way on our bottom line leverage this year. So it's pretty disappointing result for us. I mean obviously they are Hardie financials so they are good financials but financial improvement is not good. So we see that as a temporary situation.

I guess the story around SG&A there is that it's just incremental growth there is no need for further step change or I guess returns you get from further investment in SG&A. You still saying the returns from the prior investment so there is no need to have another big step up.

Yes as far as the market programs we don't have any major launches or anything that we think is going to take a lot of dollars. As far as our field sales we made a lot of additions there, we had some incrementals but it won't be a step change which we had like a year ago. Building up the debt at the senior level that cost you a bit but I think that will get lost, you know it's not big enough to really see it drive the EBIT number but you will see SG&A increases at that level but I don't think they're going to be big enough to worry about.

The next question comes from Andrew Peros from Credit Suisse. Please go ahead.

You kind of answered my question around inventory but perhaps I can ask a question why you -- you’ve obviously talked about the inventory rolled over -- [indiscernible] running a plant bit harder, just wondering to what degree will that have a positive impact on your EBIT margins over that period and is that potential for that to more than offset those startup costs that you’re talking about throughout the remainder of this fiscal year?

I think the number to look for this year is our guidance number, so we guide you down and we guide you down because the U.S. forecast has been reduced and U.S. forecast has been reduced because the operating center of business is costing us more than we originally had planned for. So I mean I think our guidance is you know what it should be and it does reflect -- we're not out of the woods on the unit cost and freight cost increases and that's somewhat related to startups. I do feel way better about our trend line and existing equipment. I think we've addressed a few of those issues and we put those behind us pretty quickly but yes so as far as anything else on EBIT margin for this year, Matt indicated their guidance change because of the U.S. EBIT. So I think you can figure out where our EBIT margin expectation is. We expect to be at the top of the range just like we always say, but I'm analyzing [ph] as you already know with the kind of market demand we had we should be above the range of this year and we stub their toe in manufacturing, that's why we're just right on top of the range.

Thank you. At this time we are showing no further questions from the phone.

All right, thank you. Appreciate everybody. Thanks.