Reece Limited · ASX:REH
Reece — Investor Presentation (August 2021)
65 slides from Reece's investor presentation, Aug 24, 2021
Slide 1: FY21 Investor Presentation
ASX Announcement 24 August 2021 FY21 Investor Presentation Growth and opportunity. Reece Limited (“Reece Group”; ASX:REH) announces its financial results for the full year ended 30 June 2021. Attached is the FY21 Results Presentation. For further information contact: Lizzy Geremia Scott Newstead Med
Slide 2: Full Year Results 2021
Full Year Results 2021 August 2021
Slide 3: Presenters
Reece Group – Full Year Results 2 Presenters Peter Wilson Andrew Cowlishaw Group Chief Executive Officer Group Chief Financial Officer & Managing Director since 2008 20+ years' experience in finance 25+ years' experience at Reece, roles. Former Partner at EY including roles as General Manager of Ope
Slide 4: Disclaimer
Reece Group – Full Year Results 3 Disclaimer The material in this presentation has been prepared by Reece Limited (ABN 49 004 313 133) (“Reece") (ASX:REH) and is general background information about Reece's activities current as at the date of this presentation. The information is given in summary f
Slide 5: What we'll share today
Reece Group – Full Year Results 4 What we’ll share today Our focus Financial Business FY21 summary highlights Financial performance
Slide 6: 2021 continued to challenge the business
Reece Group – Full Year Results 5 2021 continued to challenge the business
Slide 7: What we'll share today
Reece Group – Full Year Results 6 What we’ll share today Our focus Financial Business FY21 summary highlights Financial performance
Slide 8: Our focus
01 Our focus
Slide 9: Our Blueprint
Reece Group – Full Year Results 8 Our Blueprint Inspired Live the Embrace Execute Deliver by our Reece our 2030 Strategic Customer Purpose Way Vision Priorities Promise
Slide 10: Our Purpose & Values
Reece Group – Full Year Results 9 Our Purpose & Values To improve the lives of our customers and our people by striving for greatness every day. Customers Discover Grow as Innovate Try. Try. Try. for life. your best. a team. big and small. Own it. Keep it Do the Be humble. Write the simple. right th
Slide 11: Doing the right thing
Reece Group – Full Year Results 10 Doing the right thing Reece came 2nd in top 10 performing brands in CSR in Australia.
Slide 12: Our sustainability strategy
Reece Group – Full Year Results 11 Our sustainability strategy Our Focus Areas 1. 2. 3. Sustainable Business Empowered Trades Resilient Communities Reducing our environmental Investing in our industry to create Meaningfully contributing to impact and promoting sustainable more sustainable ways of wo
Slide 13: 2030 Vision
Reece Group – Full Year Results 12 2030 Vision We will be the trade's most valuable partner helping them succeed in a digital world.
Slide 14: Our Strategic Priorities
Reece Group – Full Year Results 13 Our Strategic Priorities 01 02 03 Brilliant Investing for Delivering Fundamentals Growth Innovation
Slide 15: What we'll share today
Reece Group – Full Year Results 14 What we’ll share today Financial Our focus summary Business FY21 highlights Financial performance
Slide 16: Financial highlights
Reece Group – Full Year Results 15 Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 4% up 11% up 20% up 25% up 10% to $6.3b to $720m to $493m to $286m to 44 cents Final dividend Leverage ratio** (Net Debt / EBITDA*) 12 cents per share 1.7x Total FY21 dividend 18 cents *Normalis
Slide 17: Segment performance
Reece Group – Full Year Results 16 Segment performance Sales Revenue ANZ (A$m) • Sales up 9% 7000 US 6000 • Sales up 11% on constant currency basis 5000 • Sales flat on reported basis 4000 Group 3000 • Sales up 4% 2000 • Unfavourable FX impact $362m 1000 0 ANZ US Total FY20 FY21 Refer to Appendix A
Slide 18: Business Highlights
03 Business Highlights
Slide 19: Business highlights ANZ US
Business highlights | ANZ us
Slide 20: Business highlights ANZ
Business highlights i ANZ
Slide 21: Brilliant Fundamentals
Reece Group – Full Year Results 20 01 Brilliant Fundamentals
Slide 22: SafeR – digitising our safety journey
Reece Group – Full Year Results 21 SafeR – digitising our safety journey 20% LTIFR incidents 200k + safety walks completed
Slide 23: Australia & New Zealand network
Reece Group – Full Year Results 22 Australia & New Zealand network 11 122 52 642 44 183 178 37 15
Slide 24: Expanding our market leading products
Reece Group – Full Year Results 23 Expanding our market leading products
Slide 25: Helping to connect tradespeople to a digital ecosystem
Reece GroupReece – Corporate Group –Presentation Full Year Results 2021 24 Helping to connect tradespeople to a digital ecosystem
Slide 26: Continuous Improvement
Reece Group – Full Year Results 25 Continuous Improvement “At a minimum we’re going to double our capacity, so we’re going to be able to get a lot more quotes done for our customers” Chris, Business Development Manager, Metalflex
Slide 27: Investing for Growth
Reece Group – Full Year Results 26 02 Investing for Growth
Slide 28: Current environment has enabled growth
Reece Group – Full Year Results 27 Current environment has enabled growth Market Conditions Ability to supply • Homebuilder • Consistent sourcing challenges • Investment in living spaces • More consistent supply than competitors • Movement to suburban fringe & rural areas • Long standing supplier re
Slide 29: Delivering Innovation
Reece Group – Full Year Results 28 03 Delivering Innovation
Slide 30: Delivering innovation
Reece Group – Full Year Results 29 Capability Delivering innovation Creativity Commerciality
Slide 31: Breakthrough Innovation Group (BIG)
Reece Group – Full Year Results 30 Innovation, insights Breakthrough and capability Innovation Group (BIG) Transforming brands New ideas that through strategy & protect and grow design Reece
Slide 32: Digitising trades / Re-inventing trade education
Reece Group – Full Year Results 31 Digitising Re-inventing trades trade education Superseed Ventures invests in start-ups, creates new Connecting Tailoring businesses and helps them trades trades scale within the Reece to platforms finance Group and beyond.
Slide 33: Delivering Innovation today
Reece Group – Full Year Results 32 Delivering Innovation today
Slide 34: Our people feel supported
Reece Group – Full Year Results 33 Our people feel supported Employee engagement score 82
Slide 35: Ranked fourth in the Property, Construction & Transport sectors, 2021
Reece Group – Full Year Results 34 Ranked fourth in the Property, Construction & Transport sectors, 2021
Slide 36: An exclusive job management service
Reece Group – Full Year Results 35 An exclusive job management service, customised for our market.
Slide 37: Next Gen Point of Sale
Reece Group – Full Year Results 36 Next Gen Point of Sale Easy to learn Faster to serve Improved accuracy
Slide 38: Re-inventing education for trades
Reece Group – Full Year Results 37 Re-inventing education for trades through innovative content and digital delivery.
Slide 39: Active users
Reece GroupReece – Corporate Group –Presentation Full Year Results 2021 38 35% Active users
Slide 40: Business highlights US
Business highlights US
Slide 41: Brilliant Fundamentals
Reece Group – Full Year Results 40 01 Brilliant Fundamentals
Slide 42: Safety
Reece Group – Full Year Results 41 Safety Providing an exceptional and safe customer and team member experience
Slide 43: US network
Reece Group – Full Year Results 42 US network 189
Slide 44: Continuous Improvement
Reece Group – Full Year Results 43 Continuous Improvement “It’s saving an hour and a half out of my day, everyday, so that’s pretty exciting” Jenny, Cash Applications Manager, MORSCO
Slide 45: Embedding operational excellence
Reece Group – Full Year Results 44 Embedding operational excellence Improving our branch process and reporting approach
Slide 46: People promise
Reece Group – Full Year Results 45 People promise
Slide 47: Proudly Essential
Reece Group – Full Year Results 46 Proudly Essential Supporting the Plumbing, HVAC & Waterworks contractor.
Slide 48: Investing for Growth
Reece Group – Full Year Results 47 02 Investing for Growth
Slide 49: R&R Trials
Reece Group – Full Year Results 48 R&R Trials Instant credit Saturday trade Storage lockers Relationship building
Slide 50: New stores testing new models
Reece Group – Full Year Results 49 New stores testing new models Buelton, CA – Plumbing Ocala, Florida – Waterworkds Rockwell Texas – Plumbing & HVAC Kissimmee, FL – Waterworks
Slide 51: Net Promoter Score
Reece GroupReece – Corporate Group –Presentation Full Year Results 2021 50 Customers recommend us Net Promoter Score +64
Slide 52: Economic commentary
Economic commentary
Slide 53: ANZ economic commentary
Reece Group – Full Year Results 52 ANZ economic commentary Dwelling Approvals Dwelling Completions (000s) (000s) 239 219 213 215 231 223 232 202 200 214 217 193 193 191 198 200 201 187 162 165 174 148 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21
Slide 54: US economic commentary
Reece Group – Full Year Results 53 US economic commentary Single + multi-family housing starts Leading indicator of remodeling activity (000s) (US$bn / ROC%) Single Famil y 550 10.0% Mult i-Family 465 6.3% 6.7% 6.8% 6.5% 435 500 6.0% 6.2% 5.5% 5.4% 4.7% 4.8%5.0% 3.4% 4.0% 400 3.0% 3.0% 450 1.1% 1.9%
Slide 55: What we'll share today
Reece Group – Full Year Results 54 What we’ll share today FY21 Our focus Financial Business Financial summary highlights performance
Slide 56: Financial highlights
Reece Group – Full Year Results 55 Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 4% up 11% up 20% up 25% up 10% to $6,271m to $720m to $493m to $286m to 44 cents from $6,010m from $650m from $411m from $229m from 40 cents Final 12 cents per share, fully franked Normalised di
Slide 57: ANZ segment performance
Reece Group – Full Year Results 56 ANZ segment performance • Record increase in FY 21 financial metrics FY21 FY20 Var. (%) 30 June 2021 (A$m) • Sales revenue up 9% reflecting solid demand across all regions Sales revenue 3,154 2,888 9% • Inflation dynamic H2 3% • EBITDA margin expansion Normalised E
Slide 58: US segment performance
Reece Group – Full Year Results 57 US segment performance AUD USD • Sales up 11% on FY 21 a constant currency 30 June 2021 FY21 FY20 Var. (%) FY21 FY20 Var. (%) basis (A$m) • Unfavourable FX impact $362m Sales revenue 3,117m 3,122m 2,333m 2,094m 11% • Excluding Todd Pipe, USD sales Normalised growth
Slide 59: Cashflow
Reece Group – Full Year Results 58 FY21 Cashflow 30 June 2021 (A$m) FY21 FY20 Normalised EBITDA* 720 650 Net Working Capital Net movements in working capital (152) 134 (A$m) Non-cash items in EBITDA (2) (8) Income tax paid (119) (90) 0.25 1000 Finance costs (75) (85) 0.2 Cash flow from operations 37
Slide 60: Balance sheet
Reece Group – Full Year Results 59 Net debt including lease liabilities Balance sheet Net Debt* (A$m) FY21 FY20 (A$m) Cash and cash 829 1,005 equivalents 1600 716 2.5 648 Senior debt 1,336 1,765 1400 716 647 2 1200 716 Lease liabilities 670 716 1000 1.5 800 670 600 1 Net debt* 1,177 1,476 FY18 400 7
Slide 61: Summary
Summary
Slide 62: The future continues to be unpredictable
Reece Group – Full Year Results 61 The future continues to be unpredictable Investment in the US Uplift in ANZ FY21 growth CAPEX positively Operational impacted by Step change in Step change in inflation OPEX CAPEX Price inflation Ongoing Supply chain Labour Capacity COVID waves constraints shortage
Slide 63: Summary
Reece Group – Full Year Results 62 Summary Continued Record result external challenges Long-term focus Investing for the future
Slide 64: Reece Group
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Slide 65: FX bridge
Reece Group – Full Year Results 64 7000 FX bridge 3,479 6,271 -362 6000 5000 4000 3,154 3000 2000 1000 0 ANZ Sales US Sales FX impact FY21 Sales