Gwa Group Limited · ASX:GWA
Gwa — H1 FY2024 Earnings Presentation
33 slides from Gwa's earnings presentation, Feb 19, 2024
Slide 1: ASX Release: Financial results presentation for half year ended 31 December 2023
19 February 2024 ASX Release GWA Group Limited (GWA Group) – Financial results presentation for the half year ended 31 December 2023 GWA Group encloses the following document for immediate release to the market: “Results Presentation – Half Year ended 31 December 2023”. On 19 February 2024 at 10.00
Slide 2: GWA Results Presentation Half Year Ended December 2023
GWA RESULTS PRESENTATION HALF YEAR ENDED 31 DECEMBER 2023 > 19 FEBRUARY 2024
Slide 3: Our Presenters Today
OUR PRESENTERS TODAY Urs Meyerhans Calin Scott Craig Norwell Managing Director and CEO Group Chief Financial Officer Group Executive - Sales 2
Slide 4: Agenda
AGENDA 01 OVERVIEW 02 GROUP FINANCIAL RESULTS 03 BUSINESS PERFORMANCE 04 NEW PRODUCTS 05 STRATEGIC UPDATE 06 SUMMARY & FY24 OUTLOOK 07 Q&A APPENDIX 3
Slide 5: Overview
1 OVERVIEW
Slide 6: H1 FY24 Headlines
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Disciplined execution delivers results in uncertain market and economic conditions • Continued momentum into H1 FY24: o Volume growth of 2% in the Australian market; o Improved EBIT and EBIT margin in
Slide 7: Continued commitment to safety
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Continued commitment to safety • Worker insights (a leading indicator) continues to increase in FY24 resulting in improved incidence reporting • H1 FY24 – November recorded 1 minor LTI & MTI, both rel
Slide 8: Group Financial Results
GROUP 2 FINANCIAL RESULTS
Slide 9: Proactive management of controllables
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook A$m Normalised1 1H FY24 1H FY23 % Change Proactive management of controllables Revenue 206.0 207.1 -0.5% EBITDA 46.9 43.4 8.2% • Normalised results EBIT 37.3 34.1 9.3% o Revenue largely in line with F
Slide 10: 9% EBIT Improvement on the prior corresponding period
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Normalised¹ EBIT Bridge (A$M) 9% EBIT Improvement on the prior corresponding period • Volume: AU increase of 2% offset by decline in NZ & UK with both markets experiencing significant economic difficu
Slide 11: Strong cash flow from operations and free cash flow
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Strong cash flow from operations Cash flow from Continuing Operations A$M FY24 FY23 and free cash flow EBITDA 46.9 43.4 Net movement in Working Capital 14.4 2.2 • Cash conversion* improved to 130%; Ot
Slide 12: FY24 interim dividend of 7.0c per share fully franked
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook FY24 interim dividend of 7.0c per share fully franked 8.0 3.5 7.0 6.5 8.0 7.0 7.0 6.0 6.0 FY20 FY21 FY22 FY23 FY24 Final ordinary Interim ordinary 11
Slide 13: Strengthened financial position
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Metrics1 30 June 30 June 30 June 30 June 31 Dec Strengthened financial position 2020 2021 2022 2023 2023 Net Debt 144.8 104.8 138.2 117.0 96.9 Leverage Ratio • Net debt down 17% from June 2023 due to
Slide 14: Business Performance
BUSINESS PERFORMANCE ST wil!
Slide 15: Revenue largely in line with H1 FY23
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Revenue largely in line with H1 FY23 H1 FY24 Revenue Revenue commentary $ Revenue & % of Group AUD 1Q FY24 2Q FY24 Australia AUD $m $m 85.6 86.0 ‒ H1 improvement driven by volume growth initiatives $1
Slide 16: Revenue results by State (AU)
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Revenue results by State (AU) Mixed performance across Australia NSW o R&R softness offset by builder and project wins with key customers A$m Revenue 1H FY24 1H FY23 ∆ LY % Change NSW 60.2 61.3 (1.1)
Slide 17: Mixed Merchants Results & 'Win the Plumber' momentum
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Mixed Merchants Results & ‘Win the Plumber’ momentum Customer A vs PcP Customer B vs PcP 1QFY24 2QFY24 1HFY24 1QFY24 2QFY24 1HFY24 2 merchant partners in growth of 5-10%, and another 3.0% in line with
Slide 18: New Products
NEW 4 PRODUCTS
Slide 19: Exciting NPD launches incorporating leading edge design and technology
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Exciting NPD launches incorporating leading edge design and technology. o Contura II Hero Collection – showcasing our latest design, technologies and materials to capture bigger share of design-led ma
Slide 20: Strategy Update
extraordinary ~ today, and for tomorrow INNOVATE THROUGH, GROW OUR AFTER FOCUS ON STRATEGIC WINTHE PLUMBER | peSIGNS PARTNERSHIPS MARKETOFFERINGS | GROWTH OPPORTUNITIES, STRATEGY UPDATE Ss WP trvinormenta., SOCIAL, COVERNANCE A surtainable busines tat crve valve ad fel growth [B|) Auonen oncanisario
Slide 21: Excellent progress made on Strategy
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Excellent progress made on Strategy. Key Performance Measures Progress • Win the Plumber Win the Plumber o 21,700+ plumbers signed up and categorized between new build and maintenance plumbers; 25,000
Slide 22: Summary & FY24 Outlook
SUMMARY & 6 FY24 OUTLOOK
Slide 23: Summary
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Changes implemented in FY23 in response to market conditions yielding results in FY24. • Disciplined execution resulting in improved financial performance o Volume growth of 2% in Australia. o EBIT an
Slide 24: FY24 Outlook
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook FY24 OUTLOOK Key focus FY24 commentary • Commercial – continuing demand for new build in health and aged care and Commercial R&R. Key Markets* • Residential detached – solid level of completions expec
Slide 25: Q&A
7 Q&A
Slide 26: Disclaimer
DISCLAIMER o This Presentation contains projections and other prospective statements that represent GWA's assumptions and views, including expectations and projections about GWA's business, the industry in which it operates and management’s own beliefs and assumptions. Such matters require subjectiv
Slide 27: Appendix
8 APPENDIX
Slide 28: FY24 Key Assumptions
1 FY24 Key Assumptions Area Assumption Australian market backdrop BIS total building activity data2 is indicating a market decline of -11% in FY24 (constant prices) Price increase ~4% implemented in Australia from 1 February 2024 D&A (depreciation and amortisation) ~$5.0-6.0m excluding the impact of
Slide 29: Continuing our strength in Sanitaryware
Continuing our strength in Sanitaryware. Segment Category Valves Project Basins, Sinks, 25% Sub-Segment1 Tubs & Baths 1% 20% Commercial 23% Sanitaryware 45% Merchant Muli-Res 59% 4% R&R Builder 56% 16% Taps & Resi Showers 17% 34% Geography Brand International 7% Other 17% New Zealand 9% Dorf 2% Meth
Slide 30: Australian Market Context – Residential completions expected to decline
Australian Market Context – Residential completions expected to decline but remain at elevated levels in FY24 with multi- residential to pick up Residential¹ Multi - Residential² 140,000 120,000 120,000 100,000 Quantity Completed Annually Quantity Completed Annually 100,000 80,000 80,000 60,000 60,0
Slide 31: Australian Market Context – Commercial work done expected to remain steady
Australian Market Context – Commercial work done expected to remain steady, R&R declining from historically elevated levels Commercial¹ Repair and Renovation² 120,000 14,000 12,000 Quantity Completed Annually 100,000 $m Approved Annually 10,000 80,000 8,000 60,000 6,000 40,000 4,000 20,000 2,000 0 0
Slide 32: Australian Market Context – Residential completions expected to remain solid
Australian Market Context – Residential completions expected to remain solid during FY24, despite approvals declining from historical highs (Completions’ lag vs. approvals ~15 months) 160,000 140,000 Quantity Completed Annually 120,000 100,000 80,000 60,000 40,000 20,000 0 FY-2010 FY-2011 FY-2012 FY
Slide 33: Thank You
THANK YOU GWA RESULTS PRESENTATION HALF YEAR ENDED 31 DECEMBER 2023 > 19 FEBRUARY 2024