Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — H1 FY2020 Earnings Presentation
27 slides from Reliance Worldwide's earnings presentation, Feb 24, 2020
Slide 1: 1H FY20 Results Presentation
1H FY20 Results Presentation 24 February 2020 RELIANCE WORLDWIDE CORPORATION LIMITED ACN 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 (24 February 2020). 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: Agenda
Agenda 1. Highlights 04 2. Financial Performance 12 3. Segment Performance 16 4. Outlook 20 3
Slide 4: Highlights
Highlights 4
Slide 5: Key Business Highlights
Key Business Highlights Core business remains strong, achieving positive growth rates and strong cash generation despite challenging market backdrop ▪ Reported net sales growth of 5% • Reported sales growth in the Americas of 7%, like-for-like growth of 4.2% • UK Plumbing & Heating sales up 3% • APA
Slide 6: 1H FY2020 Financial Highlights
1H FY2020 Financial Highlights Net sales EBITDA 2 Adjusted NPAT 2 $569.3 million $126.3 million $63.7 million +5% growth overall1 -2% on prior period -21% on prior period Operating cash flow Balance Sheet John Guest synergies realised $112.8 million further strengthened $12.3 million +163% Pro-forma
Slide 7: Interim dividend up 12.5% to 4.5 cents per share
Interim dividend up 12.5% to 4.5 cents per share Higher dividend supported by increased Cash Inflow from Operating Activities Cash Inflow from Dividends Declared Interim Dividend Declared A$m Operating Activities (Cents per Share) A$m 40 5.0 120 112.8 4.5 35.6 4.5 35 4.0 31.6 100 4.0 30 3.5 80 3.0 2
Slide 8: The story of the half
The story of the half Revenue and operating cash flow growth despite mixed market conditions ▪ Americas like-for-like sales up 4.2%, impacted by strong prior period comparatives and planned phasing of first half/second half marketing activity in FY2020 ▪ UK P&H sales up 3%, APAC external sales up 1%
Slide 9: Specific regional factors impacted performance
Specific regional factors impacted performance Americas Asia Pacific EMEA Brexit and UK political uncertainty US remodelling activity slowed to impacted performance 4.8% annual growth rate Australian new housing starts down 21.5% in year end Sept ‘19 Cycling a challenging comp: low British Merchants
Slide 10: Progress update on Management Priorities FY2020
Progress update on Management Priorities FY2020 ▪ Delivery of above market top line growth in all key geographies • Achieved in UK and Australia; USA impacted by sales phasing between 1st and 2nd halves of FY2020, and new product sales ▪ Realisation of John Guest related synergies • $12.3m in synerg
Slide 11: Progress update on Management Priorities FY2020
Progress update on Management Priorities FY2020 ▪ Prudent capital expenditure allocation • Capex range lowered to $55m to $65m, down from $65m to $75m ▪ Delivery of ERP upgrade in the UK • ERP roll out in the UK scheduled for early March – project is on time and on budget ▪ Successful commercialisat
Slide 12: Financial Performance
Financial Performance 12
Slide 13: 1H FY20 Consolidated Results
1H FY20 Consolidated Results (A$m) 1H FY20 1H FY191 Variance Commentary ▪ Net sales up 5% over pcp (0.4% on a constant currency Net Sales 569.3 544.2 4.6% basis) Reported EBITDA 126.3 128.6 (1.8%) ▪ Reported revenue performance varied across 3 segments2: EBITDA margin 22.2% 23.6% (140 bps) • America
Slide 14: Strong growth in Cash Flow from Operations
Strong growth in Cash Flow from Operations (A$m) 1H FY20 1H FY19 Variance Commentary ▪ Cash flow from operations1 generated Reported EBITDA 126.3 120.7 + 5% $132.8 million in HY2020, an increase of Changes in Working Capital + 6.5 (51.2) n/m Cash flow from operations1 132.8 69.5 + 91% 91% over HY201
Slide 15: Balance Sheet Strength
Balance Sheet Strength Debt metrics 31 December 30 June Commentary (A$m) 2019 2019 ▪ Strong balance sheet with pro-forma net leverage of Cash and cash equivalents 24.4 69.3 1.57x at 31 December 20191 Overdraft 9.0 0 ▪ Net debt reduced by $31.9m since 30 June 2019 Gross Borrowings 410.1 495.9 ▪ Reduc
Slide 16: Segment Performance
Segment Performance 16
Slide 17: Segment Results – Americas
Segment Results – Americas (A$m) 1H FY20 1H FY19 Variance Net sales1 346.8 323.6 + 7.2% EBITDA2 53.6 59.0 (9.2%) EBITDA margin 15.5% 18.2% (270 bps) Adjusted EBITDA3 53.6 59.9 (11.1%) Adjusted EBITDA margin 15.5% 18.5% (300 bps) Financial commentary Operational commentary ▪ Net sales growth was impa
Slide 18: Segment Results – Asia Pacific
Segment Results – Asia Pacific (A$m) 1H FY20 1H FY19 Variance Net sales1 125.4 129.8 (3.4%) EBITDA2 22.8 27.3 (16.4%) EBITDA margin 18.2% 21.0% (280 bps) Adjusted EBITDA3 22.8 27.6 (17.4%) Adjusted EBITDA margin 18.2% 21.2% (300 bps) Financial commentary Operational commentary ▪ Asia Pacific recorde
Slide 19: Segment Results – EMEA
Segment Results – EMEA (A$m) 1H FY20 1H FY19 Variance Net sales1 173.6 172.1 + 0.9% EBITDA2 52.3 44.3 + 18.1% EBITDA margin 30.1% 25.7% +440 bps Adjusted EBITDA3 52.3 49.3 + 6.1% Adjusted EBITDA margin 30.1% 28.6% 150bps Financial commentary Operational commentary ▪ Net sales in EMEA were up 1% to $
Slide 20: Outlook
Outlook 20
Slide 21: Impacts of coronavirus
Impacts of coronavirus Current impacts on RWC operations are limited to potential supply interruptions ▪ Preliminary assessment indicates the coronavirus will have minimal impact in the short term ▪ The situation continues to evolve and we continue to re-evaluate impacts and our response ▪ Key suppl
Slide 22: Brexit
Brexit The UK left the European Union (EU) on 31 January 2020 without concluding negotiations for ongoing trade terms ▪ UK and EU now in a transition period until 31 December 31, 2020 as they work out a future trade relationship ▪ During this time the status quo remains: Britain remains part of the
Slide 23: FY2020 Outlook
FY2020 Outlook ▪ RWC has amended its earnings guidance for FY2020 to incorporate the impact of the first half financial performance ▪ The outlook for the full year assumes: • Stronger sales performance in the Americas in the second half, including the benefit of key marketing and promotional activit
Slide 24: FY2020 Earnings Guidance
FY2020 Earnings Guidance Earnings guidance is provided on a Net Profit after Tax (NPAT) basis ▪ RWC expects Adjusted NPAT to be in the range of $140 million to $150 million ▪ This corresponds to an EBITDA range of $265 million to $280 million, inclusive of the effect of AASB16: Leases1 ▪ The NPAT ra
Slide 25: RWC's Social Impact Report released today
RWC’s Social Impact Report released today This report represents our first comprehensive review of our sustainability achievements and goals. 25
Slide 26: Summary: RWC's business fundamentals remain strong
Summary RWC’s business fundamentals remain strong ▪ RWC has strong core businesses in its most important markets of the USA, Australia and UK ▪ We continue to have a robust and diverse business across end users, channels, geographic reach, product, raw materials and technology ▪ Our confidence in th
Slide 27: Thank you.
Thank you.