0:01 Thank you for standing by, and welcome to the James Hardie Industries Q3 FY22 Results Briefing. [Operator Instructions]. 0:26 I would now like to hand the conference over to Dr. Harold Wiens, Interim CEO. Please go ahead.

0:34 Hello, everyone. And welcome to our third quarter fiscal year 2022 earnings call. I'm Harold Wiens, Interim CEO of James Hardie. On page 2, you will see our standard cautionary note on forward-looking statements. Please note that this presentation does contain forward-looking statements, and also the use of non-GAAP financial information. 1:02 Let's move on to page 3, where you will see our agenda and speakers for today. I'm proud to be joined by our CFO Jason Meili; our North American President Sean Gadd; and our Executive Vice President of Global Operations. Ryan Kilcullen. 1:21 Today, Sean, Ryan and I will start the presentation with a strategy update. Then, Jason will discuss the third quarter financial results provided an update on a AICF Funding and review guidance. After that, we'll take your questions. 1:42 Before we begin, though, I would just like to take this opportunity to thank each of our 5000 employees from around the world for their continued effort to deliver our strong results. None of our financial results would be possible without their commitment and execution of our global strategy. 2:04 With that, let's turn to page 5. Our strategy remains unchanged, and it is embedded across all three regions and all 5000s of our team members. Our strategy incorporates our commitment to Zero Harm and ESG. Our strategy starts with focus and strong execution around our three foundational initiatives. They are LEAN actually manufacturing, customer partnership and supply chain integration. Over the last three years, it is these three foundational strategic initiatives that drove our transformation. With these initiatives fully embedded in our company, we are now focused on continuing to drive profitable growth globally through the following three strategic initiatives. 3:07 Marketing directly to the homeowner to create demand, penetrating and driving profitable growth…

13:42 Thank you, Harold and good morning and good evening everyone. It is a pleasure to speak to you all again. Let's turn to page 10. Key to driving profitable growth is our team's focus and driving a high value product mix in partnership with our customers. They're all now familiar with a matrix on the left hand side of this page, which provides a simple illustration of a North American product portfolio and the price achieved and value provided to our customers and the homeowners. 14:11 We have added today is a Tod on the right, illustrating a shift in product mix in fiscal year ‘22. Our expectation for product mix in fiscal year ‘23 and more importantly, our long-term strategic intent. In North America for the nine months ended December 31, 2021, we have seen price mix growth plus 10%. In addition to our strategic products increase in January 1, 2021, the 10% increase in price mix was driven by the product mix shifts you see in this chart, specifically in fiscal year ’22, the decrease in the proportion of sampling and backerboard volume and increasing the proportion of hottie banded exterior volume and the increase in the proportion of ColorPlus volume. 14:56 In fiscal year ’23, we expect to continue to drive price mix growth. We want to continue to decrease the proportion of volume attributable to our father brand. Continue to increase the proportion of volume attributable to Hardie branded experience and continue to grow ColorPlus to R&R and the consumer. 15:16 In addition, we will start to get small mixed benefits from the high Architectural Collection in FY23. In fiscal year ’23, we expect price mix growth in North America to be in the range of plus 7% and plus 10%. Most important to today's…

18:04 Thank you, Sean and good morning and good afternoon, everyone. Please turn to page 12, will provide an update on our transformational global capacity expansion plan. As we drive profitable growth into new and existing segments, it is imperative that we regularly add capacity to ensure that supply is kept ahead of demand. We have a globally integrated plan to ensure we do just that, not included on this slide our capacity expansion projects which are already in the commissioning phase, and which are delivering saleable product today. These include the following ramp ups, Prattville Alabama sheet machines number one and number two, which add 600 million standard feet of nameplate production capacity to our North American network. ColorPlus finishing capacity in Tacoma, Washington, and ColorPlus finishing capacity in Peru, Illinois. These three projects continue to ramp up well, adding additional capacity to our network and additional ColorPlus product, which as Sean mentioned earlier, is critical to our product mix schools that penetrating the R&R segment. 19:06 In addition to those ongoing ramp ups, we have significant additional capacity coming online in the next 24 months. Those projects are indicated in blue on this slide, and we have identified the expected commissioning dates of each. These projects are as follows. In North America, the restart of our Summerville South Carolina facility, which will add 190 million standard seats of nameplate production. We plan to ship our first truck of product from Summerville to our customers later this month. We're adding Trim finishing capacity and our Prattville Alabama Facility, and we expect to be commissioning between July and September of this year. This finishing capacity enables us to deliver more high value HLD trim to our customers. 19:50 In Westfield, Massachusetts, we're adding ColorPlus finishing capacity to a new facility…

21:39 Thank you, Ryan. Good morning, and good afternoon, everyone. I'm going to keep my commentary on the financial results brief today and focus on the third quarter. We want to make sure, we have time to provide an update on AICF funding, discuss guidance and answer all of your questions. There are a few of our standard financial slides, I will not speak to today, but we have included them within the Appendix for your reference. 22:04 I will start on slide 14 with our global results. In the third quarter, the global team continued to deliver growth above market and strong returns. As all three regions deliver double digit net sales growth and double digit adjusted EBIT growth. The global teams execution resulted in global net sales increasing 22% to $900 million. Global adjusted EBIT, increasing 22% to $204.1 million and global adjusted net income increasing 25% to $154.1 million. To support and maintain our momentum, we continue to invest significantly in our strategic initiatives. 22:52 Let's move to page 15 to discuss the North American third quarter results. In the third quarter, the North America team delivered net sales growth of 24% to $644.9 million. The team delivered strong volume growth of 12% and exceptional price mix growth of 12%. The price mix growth was delivered through continued execution in driving high-value product penetration in close partnership with our customers. In addition, with continued execution of our foundational initiatives, we were able to translate the top line results into a strong bottom line outcome with adjusted EBIT, increasing 18% to $183.3 million at a margin of 28.4%. We continue to make significant investment in future growth through marketing innovation and talents capability. 23:52 Turning now to page 16, we will discuss the Europe results. In Europe, in…

34:40 Thank you. [Operator Instructions] Your first question comes from Lisa Hagan from JPMorgan. Please go ahead.

35:05 Hi, good morning team. So in terms of North America, can you just elaborate on how you're tailoring your approach to drive? Better uptake of [Indiscernible] 35:15 year, we’ll, will it be through driving this product in the Northeast or do you think you can get some uptake in your existing markets?

35:25 [Indiscernible] if my perspective, goes back to outgoing targeting our consumer, most of their work remains in the Northeast and we expect that to remain in the Northeast for at least an extra six months before we looked expanded. And it's going to be through the R&R segments, so that together with a partnership with Magnolia will basically from our perspective, look to accelerate our penetration. Now my goal is as a brand, as a national brand. So I do the color penetration we've grown nationally [Indiscernible].

36:03 Yeah, that's right. So it looks like now you're pursuing higher ASP and APAC as well, which you – can you just talk about whether the more recent ASP shifts were seen in APAC is driven by moving that generic board to Hardie board or should we expect, a bit more ColorPlus uptake in the other regions outside of North America? A –Jason Miele: 36:26 Yeah, Lisa, currently, we don't sell color product in APAC region. But the strategy is the same across all three. It's about high-value products. They differ by location, high-value products in Europe are different than the high-value products in North America versus Asia pack. But the strategy is the same. So I'm partnering with our customers, penetrating the right segments where we can push more of those higher value products through the homeowner. So the way we're connecting to the homeowner is the same in all three regions and ensuring were delivering high value products through our customers, which is good for our customers and for us. And ultimately the value to the homeowner is higher.

37:12 Thank you. Your next question comes from Lee Power from UBS. Please go ahead.

37:17 Hi, thank you. You've kindly kind of told us that the North American mixed shots probably 7% to 10% in FY23. Is it possible to step through how we should get from there to the 16% to 20% net sales growth guidance you've given for FY23? So what you think the market is going to do and your share assumption?

37:43 Yeah, thank you and good question. From my perspective, we have seen, we believe the market is going to be fairly favorable, sort of low-single digit with respect and our volume is going to be somewhere between 9% and 13%. So we think we're going to obviously be taking share and then as we move up mixed more towards color, we continue to focus on driving in the R&R segment. I believe that the rest will come through price mix. Understand we've already taken the 5% price increase.

38:17 Yeah, and then – thank you. And then just on the price increase? I mean, we've obviously seen, and you've quoted out with hyperinflation in Europe, input cost inflation run up pretty significantly, you've traditionally taken an annual price increase, like, how do you think about doing more than one price increase a year? And how do you think the market generally will be placed to accept that if it needs to happen?

38:44 Yeah, from our perspective, I guess, when you're talking more long-term basis, we typically would have taken 2% to 3$ every year, this year we took 5%. We have planned in the North American Business Technology price increase, we'll get the rest of our price through price mix with our customers and working together with them as we drive our strategy and then now as the going into next year, we'll be considering the right pricing.

39:11 Yeah, I just add to that we, you know, last January 1, we took a 3% price increase, because obviously had significant inflation this year and significant investments back into the business through talent acquisition, marketing, and innovation. And we've delivered a 28.8% EBIT margin in North America through nine months. And now we're in a position where we're giving you guidance for next year of 30% to 33% for North American EBIT margin, with strong top line growth of 16% to 20%. That is with assuming just one price increase and as Sean said, about long-term partnerships with our customers that are going to continue to drive growth for Hardie volumes for future.

39:55 Thank you. Your next question comes from Peter Steyn from Macquarie. Please go ahead.

40:02 Good evening, gents. Thanks very much for your time, was keen to just ask a slightly more strategic question in relation to the market environment. Obviously a lot of chatter shown on on the affordability front. How do you see the interplay of growth tactics with some of the developments in the market? Do you foresee that these prep some headwinds to the full realization of some of your intentions on ColorPlus penetration as well as on the texture panel side of things?

40:39 No, I don’t – I don’t proceed Peter, I think we've got a fair amount of work to do a new products, learning process for us. We are focusing on repairing remodel segments, which obviously is less sensitive to noise we're hearing, and we do believe from what we've seen is quite a lot of pent up demand with our builders. I suspect that they'll continue to work robustly through the year, obviously, assuming they can get their labor and their materials, but we believe that they will, we feel very strong about a commitment for next year. A – Jason Miele: 41:16 [Indiscernible] I'd add to Sean's comments, as he described on page 11. We're very focused on penetrate and repair remodel segments. We think we have great game plan on how we're going to do that. Homeowner wealth has never been stronger in North America. It's an all-time high. And I thought Sean did a good job explaining the impact on those a home equity loan versus someone seeking to buy a new home. Very different scenario and so we think the game plan, we have penetrated, Repair and Remodel market is strong. We track multiple external sources. All of them are calling for a strong R&R market in our fiscal year ’20.

41:58 Thanks, Jason, just to extend the question very briefly around the architectural panel range extensions, is there a risk that you have overcomplicated supply chains much like you had with ColorPlus a number of years ago? How is the supply chain better positioned to deal with extra complexity?

42:23 Yeah, Peter. That’s good question. I'll tell you a couple of things. One is, we have been working really hard with our customer partners over the last sort of 24 months to our working capital so in general most of them will be carrying less inventory then have full and then when you look at where we want to go after, which is since you are parenting model in the West Coast to start, we've worked with some key strategic partners to get the material on the ground, but really limited materials as we start to get the engine moving on innovative part. Do you want me to offer or ask me [Indiscernible] is a prime product so the complex that is pretty low?

43:11 Thank you. Your next question comes from Andrew Scott from Morgan Stanley. Please go ahead.

43:21 Thanks, gents, Jason, question for you to start with the important milestone with the AICF. And thanks for the update there. I just want to be clear, when you've made reference to the 15% to 20% of operating cash flow, is that the operating cash flow as referenced by the AFFA i.e. after prior payment? Or is that what we might call a classic operating cash flow definition? A – Jason Miele: 43:46 Classic definition, Andrew. The one caveat is it's based off of 2006 US GAAP. So there's some minor adjustments between our stated operating cash flow and ultimately what that number is. But we've outlined that in the detail page in the appendix as well. So roughly it's our US operating cash flow.

44:07 Got it? Thank you. And then secondly, obviously, a divergence here giving guidance what so much 15 months out, I know this was spoken about in January, and you said your integration with your customers was much improved. And therefore your visibility was also improved. Just want to understand how much of what you're guarding for particularly North American businesses, is committed with customers versus just insights, just given the fact that rates are rising, the market can turn on a dime at times?

44:41 Yeah, it’s a little bit of both as we will enter, we've got commitments from customers. And we've also got what they determine in the future forward orders which we working with our customers to bring back to our business. So we can again. So we've got fairly strong commitments and then as we work through them, telling us what they see in the future. And then, without our team working with end users and tying that all together, we feel very, very confident that the numbers are right.

45:13 Thank you. Your next question comes from Keith Chau from MST Marquee. Please go ahead.

45:20 Thanks very much. Good evening, gents. Just a follow up to Andrews question, Sean. In terms of duration of line of sight. So I know, back in January, we spoke about clearing the backlog and also the forward order visibility. But if we can split out revenue and costs, your revenue or at least volumes, what you're going to get? Would you say the first six months of the year is broadly locked in and then it's a general estimation based on what you can see from customers for the second half of the year and just the same discussion of costs around how much of your cost base is locked in for the first half of FY23 versus the second half?

45:59 Yeah, I'll tell you Keith, it's not as clear as you just describe it. But we certainly have a backlog of orders that have been committed. We are working with all of our customers to understand the future, the future unlock. All our customers would tell us that they're pretty bullish on where the market is and what the end users need and as I think through preparing the model still being 65% to 70% of our business, that's going to be robust for quite some time. So we will feel good about it. Now at some point, you say six months, 12 months up quite as good as that. But we feel really good about what we've been communicated with and what orders are coming into us.

46:40 Yeah, Just [Indiscernible] middle of question, I mean, this is still a forecast. I mean, it's dependent on how many homeowners are going to remodel their homes this year. How many new construction starts are going to happen? Obviously, we have much better side-lines than we used to. We have great partnerships with our customers. So we and we do have commitments, but not through the full year. But all the data we're currently looking at indicates a strong R&R market and a strong new construction market. There's a lot of backlogs within the new construction space as well. A lot of uncompleted homes. So we feel very confident in 16% to 20% revenue guidance for that we gave today.

47:26 Understood. Thank you and then just a follow up question on the cost side in terms of your contracted costs. If you can just run through that please Jason and Sean and then you know what the assumptions are around SG&A reinvestment, LEAN, the typical indicators that you've provided in the past, if you can give us a sense of how the costs are moving. That would be useful as well. Thank you.

47:48 Yeah, fair enough, Keith. Yeah, you bring up a good point. I mean, LEAN, we started with LEAN, is our LEAN initiative over the past several years, gives us the ability and more confidence in getting guidance sooner. So the variability of our plant network is reduced, which used to be historically, something that caused variability in our P&L and so it starts with LEAN and so within costs, though, there are uncertainties within the raw material space. But we have that built into our range as far as inflation goes, last year, FY22, we talked about A$100 million A$150 million globally and inflation year-on-year here. We don't see that this year, so FY23 versus FY22, we think that's more somewhere around A$40 million to A$60 million in inflationary costs. So a much better comp per se. And we will continue to invest in SG&A, as you can see and describe SG&A and R&D. So marketing, talent and innovation will continue to invest strongly in as we have this year, as we continue to drive growth.

49:02 Thank you. Your next question comes from Peter Wilson from Credit Suisse. Please go ahead.

49:08 Good morning. Sean, a question for you please. Can you just give me an update on North American volume, where you're, where this capacity now, whether it's still customs and allocation, and you could also weave into that answer, we expected some rollout plan. Yeah, potential collection, and how are you going to manage that?

49:33 Yeah, thank you Peter. From our perspective, we have got some customers as to an allocation, obviously and throughout the [Indiscernible] that continues, but it doesn't really – doesn't impact our customers to the degree that you think because we're working every day with them, to understand their end user usage, when they're needed, where they're needed and then we adjust to make sure that it all gets in the right time. So our flow is tremendously better than it's ever been. In terms of capacity, obviously, working closely with Ryan on capacity, and making sure that there are cells of being tracked together with – with how the plants are performing, which obviously under my control, but also the new ramp up. So perhaps for one and two, we still look inside there, what has been delivered between now and the end of the year and into next year and then we got the start-up, some of which allow us to get more bought out or would roll eventually help us in terms of growth. 50:32 And then the final question around the Architectural Collection. We've got the capacity on the west side where we needed. We've got some work to do from a market development perspective to get that really growing. I think that's our focus right now and we will be sort of managing our mix coming out and from which it gets made as we get momentum in the marketplace.

50:59 Okay, good. Thank you. And once you perhaps, so just the Europe energy costs, can you explain how that was able to be contained in one quarter?

51:11 Sorry, Peter, what do you mean by being contained?

51:17 As far as the guidance is for European advisors returned to [Indiscernible]?

51:27 Oh, okay. Yeah. And, yeah, we understand, hyperinflation, we're still experiencing significant European energy costs heater, we do think that abates at some point. But the European team did take a price increase on January 1, which will help generate a better margin going forward, including Q4.

51:55 Thank you. Your next question comes from Daniel Kang from CLSA. Please go ahead.

52:02 Good morning, everyone. Just a very quick follow up in terms of the guidance for FY23. Jason, I guess your responses from prior questions just quite clear confidence on the top line expectation. Can I just confirm that you see raw materials as the key variable with regard to the low and high-end of the guidance range? Any other variables that may impact the low end high-end of the range? A – Jason Miele: 52:34 Yeah, Daniel, obviously volume is always, volume can swing a year or quarter significantly, obviously. So that's, volume assumptions, Sean gave you a price mix range of 7% to 10%. And then raw material costs, create a range and then ultimately plant performance, while it's a much more narrow band than it used to be. We have that under control. There's some potential for variation there and we consider all of that when developing the potential range of outcomes. All that said, we do feel confident in all three points of guidance we put on the page.

53:13 Got it. Got it. And, Sean, just a, I was interested in your comment on rising rates and your work that 100 basis points, will unlikely impact R&R demand, with a Fed forecast to raise rates more aggressively. Do you see that becoming an issue? At what point, does it become an issue?

53:36 I think the only issue is potential consumer confidence I ever said it doesn't. Their payments not going to be large enough to deter $50,000 recites and from my perspective, equity and households in the US is at all-time high, it is remarkable how much money it was put in the home. So there's not enough inventory to go buy new homes and so I don't see people moving out of the homes and said it's opportunity for us and I do see at this point, are now being a pre-robust, at least for the next three, four months.

54:19 Thank you. Your next question comes from Simon Thackray from Jeffries. Please go ahead.

54:25 Thanks very much. Just a couple of questions. The mix shift that you're identifying, which is in the guidance is terrific. I mean, I get it moved towards high value products and the commodity board becomes a much smaller component of the overall mix. But I just want to understand strategically and tactically, whether you are leaving the commodity board to the competitors now, in which case, the way that it used to be explained Sean was, we would never leave it to them because they would learn capabilities in Fiber Cement if we left it to them all together. So what's just to be clear, what what's the view on capacity and the fighting brands? And how these ongoing commitment to have some of that capability to ensure that competitors don't develop capabilities to take audio?

55:19 Yes, I mean, it's good. We’re going to long-term look, and review when we think about product mix, you noticed our future states still have our part of brand and so we have deliberately left two of the largest builders in North America on their product. They're the only two they get it. We pointed directly into their homes, we know exactly which items have been built when and that product is delivered to the jobsite when they need it. The reason for that we're not eliminating it completely, if you'd like to share that they take a long-term view, I'm not sure what point the market will turn in the future and at that point, I mean, I'm not afraid of partner brand – partner brand plays an important role in your product portfolio. What's important though, is when we I'm wound sampling view, it certainly drifted from what is originally meant to do. And that meant our skews, the number of skews has increased, which we basically have reset expectations for skews and also it leads to lots of segments we do like so. Now we both have the capability to understand from our end users which homes needed when they need it. And we're able to get through our customer to get there. So as we think about in the future, and that's not today, but as future capacity, or demand and maybe outsource capacity, and there's opportunity for other competitors to get in, then we'll start to consider where we pointed next. And so the capabilities we learn now will allow us to pinpoint exactly where it needs to go. I feel much better about what are these and we have time to go, but I haven't eliminated for that very reason.

56:55 Yeah. Okay. So still, still, still consistent in terms of the historical strategy, in terms of protection. So just quickly short, just the New Architectural Collection, the structural pedal, I just trying to understand, this display will replace some of the other Hardie Fiber Cement panels that we've seen over time in terms of like the sky on range, etc. Does it actually get rid of those is the replace those altogether?

57:27 [Indiscernible] that’s not as Australian brand, so honestly that has to change, but I will tell you from the US perspective, we've started on the west coast for the very reason to really make sure, we open up a new category. We are trying to capitalise on existing lines. Now, it will be – there’ll be an opportunity to do that and it's still good for our financials as we do it. But our purpose is to go after the other 49% that we said wasn't accessible to us in May. And so these, these are the first step into more designs and, obviously, with Sea Grass, you can see we're able to get designs that don't exist today. So we are going to a place where one, we can deliver a look. It's very different to anybody, okay, one of our competitors, which puts us in a great spot. So we see that as more as a, I guess, quite a new category and not necessarily [Indiscernible].

58:25 Yes, I'll cover off on the other piece. So the panels we made today, deliver Woodloch, the panels you see in this Architectural Collection are non Woodloch. So they are different. How people end up utilizing them will vary within region, but the focus is on delivering non Woodlochs so we have four textures there that you can see that we've delivered. And it's exciting and As Sean mentioned, when we think about North America, it's helping us penetrate the 49% of the market. That is non Woodloch.

58:58 Thank you. Your next question comes from Sam Seow from City, please go ahead.

59:06 Hi guys. Great kind of price mix outcome, I guess today and over the past few quarters, but when I look back, the improvement was seen, it seems to have started well before TV add etc. And website visits [Indiscernible] recently and started picking out. Even our CME can't be able to consume the brand in a couple of months. Just wanted to ask whether or not the profit mix results the same as something else and really how much Christine is actually in this quarters result and whether, the Christine program should really only flow through in future periods?

59:41 I guess from my perspective, I think we are definitely seeing an impact of our marketing campaign. If you ask me how to size it, I can't do that. We're working on that. I do also think that when I get into the marketplace, the reality is contracts will have a backlog just like the new construction. So we've got about a four month backlog. So I do suspect that a lot of the jobs and the impact we've had so far will impact into next year. But we're going to double down on that next year. So, obviously, really continue to market directly to the consumer. You guys continue to work with our customers to get access to contractors who are ready to basically say yes to the work that's going to come out of that demand. And then at ease and acknowledge the partnership we're really going to focus on, yes, father cement, but really color is going to be [Indiscernible] accelerant where and then then the question is how long would it take between dropping – a contract being signed and being installed? I have no control over that. But like, that's kind of Demand for us.

60:47 Cool, cool, cool. And I guess obviously, it shouldn't bought from US to Europe, in this environment where I think you can basically sell everything that kind of appears that choosing to sell board adding percent margin instead of period. I know it's only small, but how do we factor that in when we read? I guess the segment results and think about you're looking forward?

61:09 Yeah, Sam, here's a strategic focus for us. We want to continue to penetrate Europe, we will continue to ship product across the ocean to Europe to ensure we deliver that growth. Fiber Cement, we are going to starting it with Europe, we said 10 years from now, we want €500 million of Fiber Cement and €500 million of Fiber Gypsum and that's the path we're on and we'll continue to execute that growth through North American capacity, until the right time, we will put a 5% of plans in Europe. So the global company, we think about it globally, we have those conversations as a global team. But there's a full commitment to ensuring we're growing that 5% business in Europe, big opportunity, Western Europe as a significant population and significant number of homes. That if we can create the right Fiber Cement business, they're a big win for global James Hardie.

62:04 Thank you. Your next question comes from Paul Quinn from RBC Capital Markets. Please go ahead.

62:13 Yeah, thanks a lot. Just a question on your slide 10 here. Take a look between fiscal year ’22 and ’23 if I'm looking at the scale, right, it looks like some plank is 25% going to 20% and ColorPlus is 20% going to 25%, just wondering if I'm in the ballpark there and then if you could describe the margin uplift from her exterior to ColorPlus and then from ColorPlus to innovation?

62:42 Yeah, just real quick Paul, just make sure the your percentage of roughly right, that gray bar includes backerboard, as well, though, and a few other products on the left is not include all of our products. But the gray bar represents low value products, which is a blank backer boards and a few others. But your percentages are roughly right. As far as the margins between the various products, you see the price points there as we push further up into innovation and ColorPlus, those would help us deliver on a higher margin and that's what some of what you're seeing in our guidance for next year, at the 30% to 33% level, we don't get specific margins by product group.

63:29 Alrighty, that's all I had.

63:30 Thanks, Paul.

63:35 Thank you. Your next question comes from Anderson Chow from Jarden in Australia. Please go ahead.

63:42 Yeah, thank you very much for taking my question. I just have a couple questions on North American business. The first one is, are you able to comment on the Architectural Collection, the new product? What sort of on the war cost comparison, it may have with, say StuCo (ph) and also just on the cost inflation that you talked a lot about in previous questions, I just want to clarify on the raw material side, are we kind of starting to see that kind of stabilize? So hence, we are kind of talking about EBIT margin for 2023 30% plus and also with regards to marketing. Are you able to say anything about the new partnership? We have, how much of that probably contributed to the to the higher SG&A in the quarter? Thanks.

64:41 I'm probably take the probably, this first part of that and I'll hand it over to Jason. So from our perspective, he talked about on the war cost is two things that I guess, I'd like him only think about. One is, I know historically, Hardie has been all about on the war costs when we think about plank and would look business going up to products like vinyl and at that point, it becomes pretty critical. For this is little bit different. One, we're going to start over labor intensive. We're also going up to breaking up stone, again, very labor intensive, the labor, shortage of labor. So unless I do – I spend less time thinking about the world costs and I think more about design. So as we think about a consumer, she likes to design, and she likes the color. She's willing to pay what's required. So it's just a very different thought for us. As we think about more and more about design, the more we realize that she's not nearly as price sensitive is obviously as you go up in this construction. We're not going to bias critique about I'm voting on [Indiscernible] 150. So, on what cost is this significant? In our segment when we go out to [Indiscernible]?

66:01 Yeah, and you also have about raw materials they live in, I think, in a way yes. I mean, FY23 are versus FY22, we use a lot more stabilization than FY22 versus FY20. In FY22 is, we had significant inflation headwinds, circa $130 to $140 million in FY 22. So that was significant, and we are still able to deliver very strong margins in all three regions. Going into this year, FY23, we still expect some inflationary pressures, but nowhere near to the same extent.

66:40 Okay. Thank you.

66:42 You got another question around our marketing costs? What we announced today would have not had any impact on Q3, however, would be in our forecast guidance that we provided today. Q – Anderson Chow: 66:56 Right, okay. Got it. Thank you. A – Jason Miele: 66:58 Thanks, Anderson.

67:02 Thank you. Your next question comes from Brooke Campbell-Crawford from [Indiscernible]. Please go ahead.

67:11 Yeah, hi. Just a question around North America margin target you've given us 30% to 33% in FY23, just wondering if the 25% to 30% range is still relevant to luxury for that division and what scenario would be 28% to get 35%?

67:35 Yeah, Brooke, the 30% to 33% is specific for fiscal year ’23. The 25% to 30% was an increase to a long-term range that used to be 20% to 25%. Depending on market conditions and how things persist this year, and what we see going into FY24 with guidance for FY24, etc. And we won't change long-term ranges, within one period, but certainly, we're very competent 30% to 33% for FY23. But it would take more than one-year to change the long-term range. So we'll take it into consideration as we get deeper into FY23.

68:18 Okay. Thanks.

68:22 Thank you. That does conclude our time for questions. I now hand back to Jason Miele for closing remarks.

68:31 Great, thank you. We'd like to thank everyone for joining us today. For those of you who have IVs in Orlando this week. We look forward to seeing you there and showing you our exciting new products and finally, the entire leadership team would like to thank all 5000 of our employees continue to execute our strategy every day, which makes these results possible. Thank you.

68:53 Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.