Tim Weiss

Tim Weiss asked about cost synergies, specifically what was attacked earlier than expected to raise the FY2026 exit rate, and if there's any timing change for the $125 million total cost synergy target. He also inquired about internal actions being taken to limit decrementals on volume in the Siding and Trim business, given implied high single-digit volume declines in the back half but better incrementals.

Answer

CEO Aaron Erter stated that 85% of the G&A cost synergy target was achieved early, but he wants to see these benefits in the P&L before considering raising the total target or accelerating timing, emphasizing no disruption to the business. He explained that actions to limit decrementals include managing shifts, variable costs, and optimizing the manufacturing footprint. He highlighted the Hardie Operating System (HOS) as key for managing costs from procurement to formulation, with actions already underway for benefits in Q3.

Tim Weiss asked about the progress on cost synergies, specifically what opportunities were attacked earlier than expected, and if there are any timing changes for the $125 million total cost synergy target. He also inquired about internal actions to limit decrementals on volume in the siding and trim business, given implied high single-digit volume declines in the back half.

Answer

CEO Aaron Erter stated that 85% of the G&A cost synergy target has been achieved, expressing satisfaction with the team's focus and lack of disruption. He indicated a desire to see these benefits reflected in the P&L before considering raising the target or accelerating timing. To limit decrementals, Aaron Erter mentioned managing shifts, variable costs, optimizing the manufacturing footprint, and leveraging the Hardie Operating System (HOS) for procurement and formulation across both legacy Hardie and AZEK businesses, with actions already underway.