Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — H1 FY2022 Earnings Presentation
30 slides from Reliance Worldwide's earnings presentation, Feb 21, 2022
Slide 1: FY22 Interim Results Presentation
FY22 Interim Results Presentation 21 February 2022 RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877
Slide 2: Important Notice
Important Notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (21 February 2022). It is information given in summary form and does not purport to be complete. The presentation is not an offer or invitation for su
Slide 3: HY22 Results Overview
HY22 Results Overview 3
Slide 4: HY22 Introduction
HY22 Introduction Building on strong volume growth and execution in FY21 Consolidation of activity levels and retention of FY21 volume gains ▪ Net sales growth of 12% versus pcp, different drivers in each region: • Americas 15% sales growth, 12% underlying growth excluding EZ-FLO + Lowe’s one-off ch
Slide 5: HY22 Financial Highlights
HY22 Financial Highlights All figures in US$ Net sales Adjusted EBITDA Adjusted NPAT $521.8 million $125.5 million $75.4 million +12% growth overall1 +5% on pcp +5% on pcp +34% on HY20 +45% on HY20 +89% on HY20 Operating cash flow Net debt increased by Interim Dividend $60.0 million $371.1 million U
Slide 6: Strong 2-year performance record
Strong 2-year performance record HY22 performance has consolidated strong volume growth sustained in FY21 Net Sales Adjusted EBITDA Adjusted NPAT US$m US$m US$m +34% +45% +89% 600 140.0 80 75.4 521.8 125.5 71.6 120.0 120.0 70 500 464.2 60 389.8 100.0 400 86.5 50 80.0 40 300 40 60.0 30 200 40.0 20 10
Slide 7: The story of the first half
The story of the first half An exceptionally challenging period from an operational perspective but demand in core markets remained resilient Markets ▪ Repair and remodel markets were resilient, new housing construction also performed strongly ▪ Dynamic pricing environment – numerous price increases
Slide 8: The story of the first half
The story of the first half Service excellence Do it Best: recognised Lowe’s Vendor Partner of the Year: Plumbing Vendor of the Year Rough Plumbing Acquisitions completed LCL RWC’s new 600,000 square foot Expansion for Distribution Centre in Alabama has more than double the future growth capacity of
Slide 9: Group Financial Performance
Group Financial Performance 9
Slide 10: Summary of HY22 Performance
Summary of HY22 Performance % Change % Change US$m HY211 HY22 HY21 HY20 ▪ HY22 net sales 12% higher than pcp, including Net Sales 464.2 521.8 12% 34% contribution from EZ-FLO Adjusted EBITDA 120.0 125.5 5% 45% ▪ Revenue growth driven by price increases, new product revenues, and core volume growth i
Slide 11: HY22 Adjusted EBITDA up 5%
HY22 Adjusted EBITDA up 5% Price increases lagged higher costs, tight SG&A cost control in the period ▪ HY22 Adjusted EBITDA increased 5% on pcp US$m ▪ Price increases to offset cost inflation averaged 7.4% of Sales for the period ▪ Adjusted EBITDA margin of 24.1% reflects inclusion of EZ-FLO and la
Slide 12: Segment results: Americas
Segment results: Americas Reported net sales up 15% over pcp, up 41% on a 2-year pcp basis 2-Year CAGR Americas First Half Revenues US$m US$m HY21 HY22 % Change % Change HY21 HY20 HY20:HY22 300 Net Sales 289.6 333.6 15% 41% 19% 200 - RWC 289.6 311.0 7% 31% 15% - EZ-FLO - 22.5 - - - 100 Adjusted EBIT
Slide 13: Americas: 12% underlying revenue growth in HY22
Americas: 12% underlying revenue growth in HY22 Consolidation of volumes following significant growth in FY21 US$m +15% ▪ Price increases and new product sales drove revenue growth, underlying volumes stable with robust repair and +12% remodelling activity despite supply chain restrictions ▪ Sales g
Slide 14: Segment results: Asia Pacific
Segment results: Asia Pacific Strong sales growth of 10% on pcp, up 21% on a 2-year pcp basis A$m HY21 HY22 % Change % Change 2-Year CAGR HY22 vs HY21 HY22 vs HY20 HY20:HY22 ▪ APAC sales growth reflected strong Net Sales 138.1 151.4 10% 21% 10% domestic demand in Australia, driven by Adjusted EBITDA
Slide 15: Segment results: EMEA
Segment results: EMEA Net sales up 1% on pcp, up 12% on a 2-year pcp basis ▪ UK demand drivers remain robust but supply £m HY21 HY22 % Change % Change 2-Year CAGR chain impacts adversely impacting HY22 vs HY21 HY22 vs HY20 HY20:HY22 residential construction and remodelling Net Sales 104.6 105.9 1% 1
Slide 16: Operating cash flow impacted by inventory increases
Operating cash flow impacted by inventory increases Cash flow performance Commentary US$m HY21 HY22 ▪ Cash flow from operations down 47% due to increase in working capital - due mainly to planned investment in Reported EBITDA 120.0 119.6 inventory to ensure continuity of supply to key channel Change
Slide 17: Increase in net debt to fund acquisitions in HY22
Increase in net debt to fund acquisitions in HY22 Debt metrics Commentary US$m 31 Dec 2020 31 Dec 2021 Cash and cash equivalents 30.5 26.4 ▪ Net debt increased by $371.1m since 31 December 2020 Gross debt 204.8 571.7 ▪ Increase is mainly due to acquisition of LCL ($28m) and EZ-FLO ($332m) Net debt1
Slide 18: Strategy and Outlook
Strategy and Outlook 18
Slide 19: RWC strategy summary
RWC strategy summary Creating Value through Product Leadership Create and deliver plumbing products that are the first choice for users Solutions for SA \w Operational the end-user X2d & Excellence Smart product solutions that Increasing value for the distributor Premium quality products improve con
Slide 20: Strategy overview
Strategy overview Our strategy remains focused on driving growth in core and adjacent markets ▪ Solutions for the end customer: Pro-plumbers and DIY customers • Smart product solutions which make the lives of our end customers easier and improves their productivity ▪ Strong Distributor relationships
Slide 21: RWC's Capital Management approach
RWC’s Capital Management approach Capital management approach aims to optimise the cost of capital and ensure ongoing access to funding to meet future requirements Strong Financial Value creation Capital management Focus Improving long term Organic Capital Capital Consistent Capital Acquisitions mar
Slide 22: Outlook for FY22
Outlook for FY22 1 Demand steady, further price increases and cost-out actions to lift margins ▪ The outlook for RWC’s key markets in FY22 remains positive from a demand perspective • Demand is underpinned by increased home remodelling activity and higher levels of new home construction ▪ Supply cha
Slide 23: Segment performance drivers: Americas
Segment performance drivers: Americas Continued strong outlook for US home improvement in CY2022 Outlook: ▪ Nominal spending for home improvements and repairs expected to expand at a stronger pace in CY 2022, inflation will be a key driver of headline growth LIRA inputs (refer LIRA chart) and output
Slide 24: Segment performance drivers: Asia Pacific
Segment performance drivers: Asia Pacific Improving Australian new residential construction expected to positively impact volumes Australian Residential Approvals1 Outlook: 200,000 ▪ Increases in residential dwelling approvals in Australia 150,000 expected to translate into ongoing strong constructi
Slide 25: Segment performance drivers: EMEA
Segment performance drivers: EMEA Supply chain disruption expected to limit growth in UK repair and remodel activity Builders Merchant Building Index1 Outlook 160 150 ▪ Underlying demand drivers in the UK remain robust, but 140 supply chain constraints continue to be challenges in the 130 constructi
Slide 26: Priorities for remainder of FY22
Priorities for remainder of FY22 Focus on consolidating and growing volumes while maintaining strong operational performance and service excellence despite supply chain dislocation ▪ Ongoing imperative: health & safety and wellbeing of our people as we manage through COVID-19 in a post- vaccination
Slide 27: 2021 Social Impact Report
2021 Social Impact Report Report to be released mid-March 2022 ▪ Two new Board-led committees established - reflect RWC’s commitment to embedding sustainability within the RWC culture: ▪ ESG ▪ Health & Safety ▪ Report includes inaugural response to TCFD framework ▪ Working with Schneider Electric, b
Slide 28: Long Term Outlook
Long Term Outlook RWC is well positioned for future growth and resilience of the business has been demonstrated through the COVID-19 pandemic ▪ RWC is focused on creating value through product leadership • Solutions for the end-user: improving contractor productivity, enabling the DIYer • Value for
Slide 29: Q&A
Q&A
Slide 30: Appendix: Reconciliation of Reported NPAT and Adjusted NPAT
Appendix: Reconciliation of Reported NPAT and Adjusted NPAT 30