Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — Investor Day (September 2019)
89 slides from Reliance Worldwide's investor day presentation, Sep 18, 2019
Slide 1: Investor Day September 2019
Investor Day September 2019
Slide 2: Important notice
Important notice This presentation contains general information about the activities of Reliance Worldwide Corporation Limited and its operating businesses at the date of presentation (18 September 2019). It is information given in summary form and does not purport to be complete. It should be read
Slide 3: Welcome and Objectives
Investor Day Welcome and Objectives Wednesday September 18, 2019
Slide 4: Agenda
Agenda Welcome and Safety 8:00am – 8:15am Heath Sharp, Rodney Maronay Strategy Overview 8:15am – 9:15am Heath Sharp, Gerry Bollman, Kal Nanji StreamLabs Product Showcase 9:15am – 10:00am Heath Sharp, Dixon Thuston, Sam Elia End User Markets 10:00am – 10:15am Heath Sharp Break 10:15am – 10:30am EMEA
Slide 5: Objectives
Objectives Key insights that you will acquire today Clarity on our vision for growth driven by talented people, shared and consistent values, and a compelling value proposition An understanding of how we leverage our growth platforms that include demand generation, distribution, innovation and M&A t
Slide 6: Strategy Review
Investor Day Strategy Review Wednesday September 18, 2019
Slide 7: Our strategy summary sets out our priorities
Our strategy summary sets out our priorities A clear growth plan focused on key customer segments underpinned by our values 7
Slide 8: Our values represent the foundation of our strategy for success
Our values represent the foundation of our strategy for success 8
Slide 9: Values inform our talent initiatives
Values inform our talent initiatives Driving programs across the group Training Implementing leadership and supervisor development programs Utilize E-Learning courses for all employee compliance training and new course development Succession planning Identifying high potential and succession c
Slide 10: Values drive our commitment to social responsibility
Values drive our commitment to social responsibility Focused on enhancing shareholder returns through sustainable and responsible practices Diversity and inclusion initiatives underway Sustainable product development efforts Proactive recycling and waste management Ongoing energy and resourc
Slide 11: Values led us to unite our family of brands
Values led us to unite our family of brands A rebranding journey to live up to the brand and connect our people 11
Slide 12: Branding challenge
Branding challenge Our ever-growing portfolio requires consistency and impact Our brands Our brands post pre 2017 2017 12 12
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Slide 14: Powerful branding…impactful execution
Powerful branding…impactful execution Aligned with our long-term objectives and brand values 14
Slide 15: Shared brand values engage our greatest asset
Shared brand values engage our greatest asset Firmly aligned with the brand, our values are engaging and connecting our people 15
Slide 16: Our Priorities And Our Growth Plan
Our Priorities And Our Growth Plan
Slide 17: Our strategic priorities
Our strategic priorities Our Purpose Our Priorities ~ Our Growth Plan Our Customers @ a S00: & nee Ea Accelerate Growth Drivers with clever iemant ae user solutions for the built ‘Taking greater ownership of driving end environment user demand and owning the project with ‘ourconnected family of bran
Slide 18: Our strategic priorities
Our strategic priorities Enabling specific initiatives to accelerate, expand and access Goals Example Activity Expanding shelf space in distribution in Achieve profitable growth in the Americas core, repair and maintenance Driving solution sales in the UK with JG markets in North America, UK and
Slide 19: Our growth plan
Our growth plan Using key levers across the organization to drive sustainable and impactful growth 19
Slide 20: RWC growth drivers
RWC growth drivers Focused activity supporting growth drivers are enabled by strong core competencies Goals Key initiatives Own the project Combining our portfolio of brands, Convert plumbers to our smart with a family ensuring ease of compatibility, solutions and gain loyalty through of compatible
Slide 21: Growth enablers – innovation
Growth enablers – innovation Development embedded in user insights to fill pipeline for current and future growth RWC horizon planning Horizon 3 New 1. Empathize 5. Launch Value Who is the user? How do we Horizon 2 What is their issue? commercialize? Emerging Horizon 1 RWC Core innovation process Ti
Slide 22: Growth enablers – M&A
Growth enablers – M&A Acquisitions will continue to be an important complement to organic growth efforts Historical Growth Driving Rationale Approach RWC has a successful track record of Given underlying market growth Value Creation Strategy acquiring and integrating rates, higher levels of grow
Slide 23: Product, the building blocks
Product, the building blocks Innovation and M&A contribute to the fundamental building blocks of growth Accessories 23
Slide 24: Revenue by category
Revenue by category While PTC fittings are a large part of our business, we have a growing, diverse range of related solutions transforming productivity and efficiency for our end users 9% 12% Brass PTC 11% Plastic PTC 12% Fittings Non-PTC FY19 Gross Pipe Revenue by category Valves 9% Fluid Tech 34%
Slide 25: Fittings provide a strong foundation
Fittings provide a strong foundation A variety of fittings solutions that deliver efficiency and reliability available through a vast network of outlets across markets and channels Available across Americas, UK, and Australia #1 position in Americas Brass PTC #1 position in Australia Growing i
Slide 26: Fittings provide a strong foundation
Fittings provide a strong foundation The fittings category, with an overall market growth of 4-5%, contribute to a solid and growing foundation Market Dynamics Applications Pipeline Organic Growth Margins A$1B global Service and repair Extending size range Brass PTC market size (inc. plastic)
Slide 27: Growing category diversification
Growing category diversification RWC has built a complete portfolio of solutions with top market positions - all aligned with the SharkBite value proposition – ease of use, efficiency, labor savings, and availability PEX pipe available across global regions Top 3 producer in US 9% Pipe Top 2 in
Slide 28: Growing category diversification
Growing category diversification Portfolio of relevant product solutions in attractive and growing end use markets to help our end users deliver, control and optimize fluids in their projects Market Dynamics Applications Pipeline Organic Growth Margins A$10B + global Essential as component Com
Slide 29: StreamLabs
StreamLabs IOT platform vision, product, and technology
Slide 30: RWC connected solution vision
RWC connected solution vision RWC IoT (Internet of Things) platform enables development of connected products across major categories firmly positioning RWC at leading edge Municipal Water Ecosystem of Solutions Enabled by RWC IOT Platform Condition information and user action Temperature Temperatur
Slide 31: StreamLabs Product
StreamLabs Product Connected water leak detection product market and opportunity 31
Slide 32: StreamLabs
StreamLabs Solutions for every homeowner and application Monitor Control Fast no plumber install Auto or manual water shutoff Whole home water monitoring Temp & pressure monitoring Learning leak alerts Drip detect functionality Smart home integrations Learning leak alerts 32
Slide 33: Market dynamics
Market dynamics The potential market for leak detection/home protection is extremely attractive The category is largely being driven by the insurance industry which has authority approaching a regulatory agency 0 800K 3.6M 37% Entrenched competitors to US homes that will file a Vacation homes US hom
Slide 34: Target customer
Target customer StreamLabs fits with RWC’s targets: customers, segments, markets, solutions RWC US existing market segments Core repair, maintenance and remodel Which Residential and commercial new construction OEM 9% segments Water heater OEMs we target Specialty solutions, including drinks d
Slide 35: Commercial approach
Commercial approach Go-to-market plan: phased approach to market Leak claim homeowners, one touch consumers, several hundred thousand people per year that 1 2 3 4 have had a leak claim and are desperate for a solution Plumbing and HVAC contractors that incentivize their work force to additional
Slide 36: StreamLabs summary
StreamLabs summary Ready for a new and growing market RWC has a robust product offering in a growing market with no entrenched competitors, with other large respected plumbing companies pushing the market Strong platform that sets the foundation for growth and expansion of Internet of Plumbing
Slide 37: StreamLabs Technology
StreamLabs Technology Scalable and flexible platform to leverage across our portfolio 37
Slide 38: Born in the serverless cloud
StreamLabs Born in the “serverless” cloud 1960 2005 2015+ 2016 CORPORATE AWS AWS Platform DATA CENTER CLOUD “SERVERLESS” CLOUD architecture Engineering resources required 38
Slide 39: Platform Overview
StreamLabs Platform Overview Hardware Backend Apps Serverless Components StreamLabs Monitor StreamLabs Database Gateway Compute App StreamLabs Third-Party Control Apps 39
Slide 40: Modular by design
StreamLabs Modular by design StreamLabs Wi-Fi module StreamLabs Monitor Water filter StreamLabs Control Water heater Underfloor heating Thermostatic valve 40
Slide 41: One App…..countless possibilities.
StreamLabs One App…..countless possibilities. ! 41
Slide 42: End Use Market and Regional Review
Investor Day End Use Market and Regional Review Wednesday September 18, 2019
Slide 43: Our customers
Our customers Our Customers Soom, Who “Contractors = Endusers + Specifiers + OEMs + Distrbutor partners eo) Key segments “= Repalt, Maintenance «Fluid technology andimprovement «Air &/ pneumatics, *Newconstruction blown fibre *Automnothe 9 AF@ a Applications “Meter to fixture, floor to ceiling = Beh
Slide 44: End use market focus
End use market focus Product development and innovation driven by robust understanding of end use market challenges; bundled solutions aimed at target end users RWC Product Categories RWC Target Contractor End Users Fittings Category Pipe Category Valves Category Integrated FluidTech Connected IOT I
Slide 45: Solutions for the built environment
Solutions for the built environment Wide ranging applications across multiple segments drive our future growth Cygnus Homes, Tru by Hilton, Duxford, UK Idaho, US SharkBite® push-to-connect Designed to reduce fittings reduced installation installation time and improve time by 75% and was flexible per
Slide 46: EMEA Review
EMEA Review 48
Slide 47: Agenda
Agenda 1. EMEA business snapshot 2. Market update 3. Growth initiatives 4. Talent 5. Operations 6. Integration update 49
Slide 48: RWC EMEA snapshot
RWC EMEA snapshot Exceptionally strong brands in a diversified set of markets, products and geographies Category Mix - UK Category Mix - Europe Brands Valves A$m 360.9 Fluid Tech Other Brass PTC Plastic PTC Net Sales1 Pipe Integrated Installation Managing Solutions Pipe A$m 109.4 15 Other Adjusted E
Slide 49: EMEA snapshot: products and customers
EMEA snapshot: products and customers RWC’s stronghold in UK plumbing and heating market is similar to the Americas whereas continental Europe is focused on OEMs in FluidTech markets Channel Mix1 Example customers Representative products Automotive Other OEM Cold water UK Wholesale Retail Speedfit U
Slide 50: EMEA market update
EMEA market update Short-term outlook clouded by economic and political uncertainty, but long-term fundamentals remain strong Short term macro trends Long term fundamentals strong Brexit introduces significant uncertainty Long term RMI outlook is positive with low UK 2020 growth forecast 1.3%
Slide 51: Brexit update and planning
Brexit update and planning RWC continues to evaluate potential implications of Brexit and has executed several initiatives to mitigate impact to the business Situation 31st October – UK due to leave European Union UK & EU strongly disagree on key aspects of a potential ‘withdrawal agreement’ U
Slide 52: Our growth priorities
Our growth priorities Enabling specific initiatives in UK and Europe to accelerate, expand and access Goals EMEA plans UK: expand share and offering in core market Achieve profitable growth in through continued focus on Speedfit range, core, repair and maintenance underfloor heating, and leveragin
Slide 53: Growth initiative – FluidTech markets
Growth initiative – FluidTech markets Attractive market opportunity that will drive growth through greater focus on the right end use segments, product fit, and resource allocation Focus Area Markets End Use Plan Drinks and Dispense and Pure Water Prioritize NPD and fill product Develop focus and
Slide 54: Talent and organization
Talent and organization Strengthened leadership team and UK organizational structure to better support growth and collaboration New Hire / New function / Additional keys to revised org design EMEA CEO leadership and Edwin de Wolf structural changes: Leverage strong roster of talent from legacy Hea
Slide 55: RWC EMEA operations snapshot
RWC EMEA operations snapshot Robust operations footprint producing over 1B finished components annually Key performance objectives UK Manufacturing Footprint LAUNCESTON 33k sq ft manufacturing Continued improvement on HSE with focus on leadership Molding, welding & assembly Deliver Continuous
Slide 56: EMEA integration update
EMEA integration update Significant integration effort in FY19 and continuing into FY20 to accelerate growth and drive synergy realization Scale of acquisition Completed in FY19 Continued efforts in FY20+ Innovative leader in plastic push to Consolidated legacy RWC into JG Transition to ERP pl
Slide 57: Americas Review
Americas Review 59
Slide 58: Agenda
Agenda 1. Americas business snapshot 2. Market update 3. Growth initiatives 4. Talent 5. Operations 6. Integration update 60
Slide 59: RWC Americas snapshot
RWC Americas snapshot Well positioned brands across a diverse product range serving multiple segments Category Mix Channel Mix Brands A$m 653.9 Hardware Plastic Net Sales1 Brass PTC PTC Wholesale OEM Export Fittings Non-PTC A$m 105.3 Adjusted Other Pipe EBITDA2 Retail Integrated Installation Valves
Slide 60: Americas market update
Americas market update Conditions that drive demand for our solutions are positive overall and across key segments Overall Core segments New construction Americas economy is relatively Repair and remodel activity Weakening demand with healthy and large slower but positive inherent volatility Ongoi
Slide 61: Americas growth plan
Americas growth plan Leverage innovation, strength of brand and product offering across distribution network to expand market share Goals Highlighted initiatives Own the project Investment in commercial end market selling and marketing with a basket capabilities designed to pull demand of RWC’s so
Slide 62: Growth initiative - commercial market
Growth initiative - commercial market Attractive market opportunity that will require investment in product and sales talent Potential revenue opportunity RWC addressable products by construction phase per project 1 2 3 4 5 US$155k Accy. 5 Story, multi-building, Firestopping (caulks, collars) 200-un
Slide 63: Growth initiative – residential service and repair
Growth initiative – residential service and repair Water heater replacement involves multiple, high value, RWC solutions Market Opportunity for RWC Potential water heater replacement value to RWC More than 7.5 million water heaters are replaced annually in the US RWC products support plumbing co
Slide 64: Growth initiative – leveraging reach
Growth initiative – leveraging reach RWC Americas well positioned to Pro customer with changing buying preferences Pro buying preferences are changing Location, availability and convenience drive purchase habits1 Pros generally avoid private label rough plumbing products1 Key RWC point of differ
Slide 65: Talent and organization
Talent and organization Organizational capability enhancement firmly aligned with key Americas growth drivers Commercial market Commercial sales resource center resources Demand… Enhance coordination Support Reach… Support connected and efficiency of commercialization and device strategy innovation
Slide 66: RWC Americas operations snapshot
RWC Americas operations snapshot Growth supportive operations and distribution facilities Key performance objectives US Manufacturing Footprint CULLMAN, AL 395k sq ft manufacturing Creating a safety focused culture Implementing Sales & Operating Planning (S&OP) Produces/Assembles valves, pipes
Slide 67: Americas integration update
Americas integration update Primary integration efforts completed in FY19 with FY20 focused on accelerating growth Completed in FY19 Continued efforts in FY20 Consolidated legacy JG USA infrastructure into Drive growth in FluidTech end markets for John RWC Americas; transition to RWC ERP Guest b
Slide 68: Operations Review
Investor Day Operations Review Wednesday September 18, 2019
Slide 69: Agenda
Agenda 1. Safety 2. Lean Management 3. Continuous Improvement 4. Procurement 5. Strategic Topics 71
Slide 70: Safety
Safety Global Improvement Strategy 72
Slide 71: Injury Rate
Injury Rate 52% reduction in injury rate in FY19 Group Lost Time Rate 3.5 Reportable Rate 3 Reportable Target 2.5 2 1.5 1 0.5 0 FY18 FY19 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 73 Note: Vertical axis measures Incident Rate (Rolling 12 months sum of injuries x 100 / avg HC YTD)
Slide 72: Safety Strategy
Safety Strategy Build a world-class safety culture to drive performance Safety culture evolution Goals Zero injuries INJURY RATE Safety as a value Employee-led safety Safety by natural Management Personal knowledge, Care for others Continuous culture instinct commitment commitment
Slide 73: Safety Foundation
Safety Foundation Emphasis on leadership, employee engagement, and key policies/procedures - Strong top leadership priority Incident reporting Leadership - Increase ownership from operations managers / supervisors (OSHA training, goals & objectives, accountability) Fatality - In place at top of the
Slide 74: FY20 safety objectives
FY20 safety objectives Continued injury reduction with actions to evolve the safety culture Safety starts with people… creating awareness… and delivering results 10% reduction in injury rate Deploy safety leadership training Implement near miss/hazard reporting – leading indicator Develop gl
Slide 75: Lean Management
Lean Management KPIs and Visual Factory 77
Slide 76: Operations KPIs
Operations KPIs Developing global metrics and approach to driving continuous improvement Plant operations metrics Safety, quality, delivery and cost Weekly/monthly tool for operations management to drive performance Scorecard Analysis / Actions Emphasis on performance vs. machine capability Me
Slide 77: Daily Lean management
Daily Lean management Connecting Ops KPIs with shop-floor visual management and accountability Shop floor visual factory Shift/daily visual tool for short-interval accountability Cullman and control Operator ownership for achieving KPI targets, reporting results, and raising barriers Superviso
Slide 78: Continuous Improvement
Continuous Improvement Driving cost out and Operations efficiency 80
Slide 79: Continuous Improvement (CI)
Continuous Improvement (CI) Building CI culture and processes Foundation Key focus areas Procurement The right leadership to build the culture and implement the process New VP Procurement on-boarded Supporting regional execution and implementing new Metrics and visual factory approach is fir
Slide 80: Global Procurement
Global Procurement Driving cost savings and implementing procurement processes Procurement Strategy Implementation Approach HIGH 1. Analyze 2. Prioritize Leverage Critical Spend cube with relevant Identify key projects Supplier relationship details Lowest landed cost Focus on actionable spend
Slide 81: Cost savings project tracking
Cost savings project tracking Project execution and visibility to results Idea Pipeline Project Tracking Financial Reporting Project ideas developed with Tracking templates underway Consolidation of project savings estimated financial impact to summarize project, savings for monthly reporting
Slide 82: Supply Chain process improvement
Supply Chain process improvement Enabled by S&OP Need for Sales and Operations Planning (S&OP) process to drive efficiency through the supply chain Engaged leading third-party consultant to conduct a diagnostic in the Americas and provide recommendations Retained a consultant trained by leadin
Slide 83: Long term strategic opportunities
Long term strategic opportunities Driving optimization across the Group Make vs. buy (e.g. brass components, flexi hoses) Leverage John Guest tooling and automation expertise across the Group Manufacturing and distribution footprint strategy Alternate manufacturing technologies (e.g. forging
Slide 84: Q&A and Wrap Up
Investor Day Q&A and Wrap Up Wednesday September 18, 2019
Slide 85: In Summary
In Summary The fundamentals of our business are stronger than ever The diversity of our business – across geographies, The strength of, and growth runway for, our core end users, channels to market, products, raw push-to-connect businesses are complemented by materials – both reduces risk and provid
Slide 86: Q&A
Q&A 88
Slide 87: Solutions to Shape the World
i Solutions to Shape the World’
Slide 88: Appendix
Appendix 90
Slide 89: RWC Group snapshot
RWC Group snapshot Global operations across the Americas, EMEA and APAC Net Sales1 Managing Operating Innovation $1,104 15 24 5 Million Manufacturing Distribution R&D AUD Facilities Centers Facilities Employing Holding Manufacturing Distributing 2,300+ 900+ 22,000+ 18 Employees Patents and SKUs Bran