Slide 1: Annual Results Presentation cover letter
S |GWA | Group Limited Www. gwagroup.com au 7 Eagleview Place Eagle Farm OLD 4009 GPO Box 1411 jrisbane QLD 400 16 August 2018 Brisbane QLD 4001 ASX On-Line Manager Company Announcements Australian Securities Exchange Dear Sir Annual Results Presentation for the Year Ended 30 June 2018 We enclose th
Slide 2: Results Presentation
Superior solutions for water Results Presentation Full Year ended 30 June 2018 16 August 2018
Slide 3: Disclaimer
Disclaimer This presentation contains non-IFRS financial measures to assist users to assess the underlying financial performance of the Group. The non-IFRS financial measures in this presentation were not the subject of a review or audit by KPMG. 2
Slide 4: Agenda
Agenda 01 Overview and key themes 02 Group financial results 03 Segment results 04 Summary and outlook 3
Slide 5: Overview and key themes
Overview and key themes | Glas Group Limited @ CAROMA *Oy ° ~~ ¢ ** ae ee i & a e e ie car «| dorf
Slide 6: Another solid result further strengthening the platform for growth through the cycle
Overview Group results Segment results Outlook Appendix Another solid result further strengthening the platform for growth through the cycle Solid result with share gains driving further growth in revenue and earnings ‒ Profitable share gains in core segments delivers revenue growth ahead of market
Slide 7: Solid financial result across metrics
Overview Group results Segment results Outlook Appendix Solid financial result across metrics Normalised¹ from Group Operations Revenue ROFE $453.2m 1.5% 0.3pp 20.5% B&K $359.3m +2.5% Operating Cashflow EBITDA $71.6m 3.8% -19.4% $89.5m Reduced due to move to new distribution centre EBIT EPS 4.7% 4.3
Slide 8: Reconciliation – Reported NPAT to normalised NPAT
Overview Group results Segment results Outlook Appendix Reconciliation – Reported NPAT to normalised NPAT FY17 FY18 A$m Continuing Discont'd Group Continuing Discont'd Group Operations Operations Total Operations² Operations³ Total⁴ Normalised¹ REVENUE 350.4 95.9 446.3 359.3 93.9 453.2 EBITDA 78.4 7
Slide 9: Higher exposure to robust R&R market provides resilience through the cycle
Overview Group results Segment results Outlook Appendix Higher exposure to robust R&R market provides resilience through the cycle B&K sales by segment % B&K sales by geography % Commercial NZ 15% 7% WA 12% NSW Multi- 34% residential 11% Renovation & Replacement VIC 53% 22% Detached housing QLD SA 2
Slide 10: Further share gains drive revenue growth above market
Overview Group results Segment results Outlook Appendix Further share gains drive revenue growth above market B&K revenue up 2.5% vs market of ~2%¹ Continued market share % growth in B&K² Renovation & Overall market showing growth in both Replacement Residential & Commercial R&R Increased ~2.5% (MAT
Slide 11: Group financial results
Group financial results GWA Group Limited IS ‘ %: 6 G «: o a eg & of, ® ae Set ae 9 — # « oH." °o .. cane ‘ o * _ & 964 ° 2 ~~ é Le @, o-« © = ae | * © " oy a gee Se ee v fs © + gs * “og! ; © < ° e ° co” oq! ©
Slide 12: Solid increase in net profit – up 4% on prior year
Overview Group results Segment results Outlook Appendix Solid increase in net profit – up 4% on prior year A$m Normalised¹ FY17 FY18 % Change ‒ Net profit up 4.3% on prior year Revenue 446.3 453.2 1.5% EBITDA 86.2 89.5 3.9% ‒ EBIT up 4.7% in line with guidance EBIT 80.6 84.4 4.7% provided at half ye
Slide 13: EBIT growth from profitable share gains
Overview Group results Segment results Outlook Appendix EBIT growth from profitable share gains Normalised Group EBIT Bridge (A$m) ‒ Group EBIT up 4.7% on prior period 95 ‒ Volume/mix: Continued focus on higher margin 6.5 (5.6) products in B&K core segments (R&R, Commercial) drives 90 (2.9) improved
Slide 14: Operating cash flow reflects working capital increase for NPD and move to new warehouse
Overview Group results Segment results Outlook Appendix Operating cash flow reflects working capital increase for NPD and move to new warehouse/distribution centre Cash flow from Operations A$M FY17 FY18 ‒ Working capital increase to support transition to new EBITDA 86.2 89.5 IDC at Prestons NSW, ne
Slide 15: Strong financial position supports growth and re-investment through the cycle
Overview Group results Segment results Outlook Appendix Strong financial position supports growth and re-investment through the cycle Metric 30 June 2015 30 June 2016 30 June 2017 30 June 2018 ‒ GWA remains in a strong financial position Net Debt 94.8 88.4 79.8 97.7 ‒ Substantial headroom within $22
Slide 16: Segment results
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Slide 17: Bathrooms & Kitchens – continued above market growth with stable margins
Overview Group results Segment results Outlook Appendix Bathrooms & Kitchens – continued above market growth with stable margins A$m Normalised FY17 FY18 % Change ‒ Revenue up 2.5%; ahead of market growth of ~2% Revenue 350.4 359.3 2.5% ‒ Continued share growth – net sales in sanitaryware, EBITDA 89
Slide 18: Doors & Access Systems – significant earnings improvement from refocusing initiatives
Overview Group results Segment results Outlook Appendix Doors & Access Systems – significant earnings improvement from refocusing initiatives A$m Normalised FY17 FY18 % Change ‒ Revenue down 2.1% Revenue 95.9 93.9 -2.1% ‒ Improved sales in NSW ~9%, VIC ~4% and SA EBITDA 7.8 9.3 20.3% ~1%; with decli
Slide 19: Summary and outlook
Summary and outlook GWA Group Limited IS wi 4 % > @ * 0 G&G ° © < eg % «> s ie. o's : & 7 @ Ve : q x « ee ete ‘*. @ — ee #66 We © oF “e, ¢ em, . a eo * aad ¢ e - % @:- co” © e ci ae «| dorf
Slide 20: GWA strategy for growth
Overview Group results Segment results Outlook Appendix GWA strategy for growth We make life better with superior solutions for water Build GWA as the most trusted and respected water solutions company Maximise shareholder value creation – NPAT growth, ROFE, TSR CUSTOMER FOCUSED CONSUMER DRIVEN Add
Slide 21: Significant progress made on strategic priorities
Overview Group results Segment results Outlook Appendix Significant progress made on strategic priorities Corporate priority Progress made ▪ Net sales growth with all major merchants in FY18 CUSTOMER FOCUSED ▪ Joint business planning driving mutually agreed targets and premiumisation Add value to cu
Slide 22: Focus on superior solutions for water strategy
Overview Group results Segment results Outlook Appendix Focus on superior solutions for water strategy Strong platform for growth • Successful divestment of the Doors & Access Systems, expected net proceeds (after transaction costs) of $96m to $98m • Market leading brands and strong market positions
Slide 23: FY19 outlook
Overview Group results Segment results Outlook Appendix FY19 outlook Key area FY19 commentary ▪ Market expected to remain relatively resilient; continued momentum in NSW & VIC; partially offset by slower conditions in QLD, WA and NZ Market Activity ▪ R&R segment expected to remain robust, (Residenti
Slide 24: Results Presentation
Superior solutions for water Results Presentation Full Year ended 30 June 2018 16 August 2018
Slide 25: Appendix
Appendix IS GWA Group Limited Pi Q * Ge J" 8g © fe ae , . wee 9 a ° / cS @ . oe _. . cK ae « s+. @ a Br & ., See . 0. Se tH seF + 2a, ° ? ©, o.6 & oe : te e Sac *. a Ch ad a » ees ; it se 2 “ail est * a od e e CAROMA
Slide 26: Proforma 5 year summary
Overview Group results Segment results Outlook Appendix Proforma 5 year summary A$m FY14 FY15 FY16 FY17 FY18 Revenue Bathrooms & Kitchens 306.6 330.0 342.0 350.4 359.3 Total Cont'd Ops 306.6 330.0 342.0 350.4 359.3 Discontinued Ops 271.4 217.8 102.5 95.9 93.9 Group Total 578.0 547.8 444.5 446.3 453.
Slide 27: Significant items relate to Door & Access Systems disposal
Overview Group results Segment results Outlook Appendix Significant items relate to Door & Access Systems disposal A$m Significant items FY17 FY18 ‒ Significant items relate to divestment Discontinued Operations transaction costs Divestment costs 0.0 (1.9) Significant items from Discontinued Ops pre
Slide 28: Quantity Completed Annually
Quantity Completed Annually 20,000 40,000 60,000 80,000 0 120,000 140,000 FY-1976 100,000 FY-1977 FY-1978 FY-1979 FY-1980 FY-1981 FY-1982 FY-1983 FY-1984 FY-1985 FY-1986 FY-1987 FY-1988 FY-1989 FY-1990 FY-1991 Source: BIS Oxford Economics: MAT, Actuals to December 2017, Forecast March 2018 – June 20
Slide 29: Quantity Completed Annually
Quantity Completed Annually 20,000 40,000 60,000 80,000 0 100,000 120,000 FY-1976 FY-1977 FY-1978 FY-1979 FY-1980 FY-1981 FY-1982 FY-1983 FY-1984 FY-1985 FY-1986 FY-1987 FY-1988 FY-1989 FY-1990 FY-1991 Source: BIS Oxford Economics: MAT, Actuals to December 2017, Forecast March 2018 – June 2022 FY-19
Slide 30: Commercial new build sustaining long term growth trajectory
Overview Group results Segment results Outlook Appendix Commercial new build sustaining long term growth trajectory Non Residential – Value of Work Done (A$m) 60,000 50,000 40,000 30,000 20,000 10,000 0 Actual Forecast Source: BIS Oxford Economics: MAT, Actuals to September 2017, Forecast December 2
Slide 31: Residential R&R segment stability provides resilience through the cycle
Overview Group results Segment results Outlook Appendix Residential R&R segment stability provides resilience through the cycle Alterations and Additions – Completions ($m) 9,000 8,000 7,000 $m Completed Annually 6,000 5,000 4,000 3,000 2,000 1,000 0 Actual Forecast Source: BIS Oxford Economics: MAT
Slide 32: Residential R&R segment is large and remains stable
Overview Group results Segment results Outlook Appendix Residential R&R segment is large and remains stable Renovation Activity (A$bn) Housing sales (‘000s) 2.5 60 2.0 50 $bn per quarter, real 000s per month 40 1.5 30 1.0 20 0.5 10 0.0 0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 95
Slide 33: Significant segment growth opportunities
Overview Group results Segment results Outlook Appendix Significant segment growth opportunities Market by segment (NSV – A$1.4bn) Residential Multi Comm Commercial R&R Residential R&R -Res $191m $123m $138m $324m $673m Rest-of-market GWA ~ 35% ~ 25% ~ 35% share share share ~ 20% share ~ 20% share 3
Slide 34: Significant category growth opportunities
Overview Group results Segment results Outlook Appendix Significant category growth opportunities Market by category (NSV – A$1.4bn) Sanitaryware Taps and Showers Baths Sinks & Tubs $574m $654m $76m $145m Rest-of-market GWA ~ 35% share ~ 20% ~ 20% ~ 12% share share share 33 Source: GWA estimates – A
Slide 35: Australian population growth
Overview Group results Segment results Outlook Appendix Australian population growth Australian population growth (%) 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Source: ABS
Slide 36: Annual net overseas migration
Overview Group results Segment results Outlook Appendix Annual net overseas migration Annual Net Overseas Migration ('000’s) 350 300 250 200 150 100 50 0 Source: ABS
Slide 37: Volume of Renovations Activity ($bn)
Overview Group results Segment results Outlook Appendix 30-35 year old detached house stock closely correlated with renovations activity and expected to grow into the early 2020s Volume of Renovations Activity ($bn) 650 40 600 35 Thousands of Houses 550 30 500 25 450 20 400 15 350 10 30-35 year (inc
Slide 38: Non Residential by sector
Overview Group results Segment results Outlook Appendix Non Residential by sector Non Residential – Value of Work Done $m 16,000 14,000 Forecast 12,000 10,000 8,000 6,000 4,000 2,000 0 Retail Offices Accommodation Transport Factory Warehouses Other C&I Education Aged Care Health Entertainment & Recr
Slide 39: Results Presentation
Superior solutions for water Results Presentation Full Year ended 30 June 2018 16 August 2018