Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — Investor Presentation (October 2021)
32 slides from Reliance Worldwide's investor presentation, Oct 26, 2021
Slide 1: Acquisition of EZ-FLO International
Acquisition of EZ-FLO International Investor Presentation 26 October 2021 RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877 1
Slide 2: Important Notice
Important Notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (26 October 2021), including the acquisition of EZ- FLO International, Inc. group (“EZ-FLO”) announced today. It is information given in summary form
Slide 3: Agenda
Agenda 1. Acquisition Summary 4 2. Overview of EZ-FLO 9 3. Integration Plan 19 4. Financial Metrics 21 5. Synergies 23 6. Summary 26 7. Appendix 29 3
Slide 4: Acquisition Summary
Acquisition Summary 4
Slide 5: Acquisition of EZ-FLO: Overview
Acquisition of EZ-FLO: Overview Leading manufacturer and distributor of plumbing products in North America Acquisition overview ▪ RWC to acquire EZ-FLO International for US$3251 million; completion expected to occur in November 2021 ▪ Acquisition values business at a multiple of 12.0x Pro Forma Adju
Slide 6: Acquisition of EZ-FLO to be debt funded
Acquisition of EZ-FLO to be debt funded ▪ $325 million acquisition cost will be debt funded from existing committed facilities ▪ Pro forma leverage of 1.78 times based on 1Q FY22 period end net debt and $325 million acquisition debt funding ▪ RWC’s leverage will remain comfortably within the target
Slide 7: Attractive acquisition aligned with RWC's M&A strategy
Attractive acquisition aligned with RWC’s M&A strategy RWC Strategic Drivers EZ-FLO alignment with RWC Strategy Product portfolio diversification ▪ EZ-FLO will deliver multiple new dimensions to RWC’s product range ▪ EASTMAN brand will immediately position RWC as a leader in Appliance Connectors: ▪
Slide 8: Strong alignment with value creation model
Strong alignment with value creation model The acquisition of EZ-FLO meets the strategic imperatives of RWC’s M&A focus Strong Financial Value creation Capital management Focus Improving long term Organic Capital Capital Consistent Capital Acquisitions margins and returns Growth Investment structure
Slide 9: Overview of EZ-FLO
Overview of EZ-FLO 9
Slide 10: Overview of EZ-FLO
Overview of EZ-FLO ▪ Leading manufacturer and distributor of plumbing supplies, including plumbing specialty products, appliance supply lines, flexible water connectors, gas connectors, stop valves and other accessories ▪ Established in 1980, expanded rapidly by adding a wide range of products ▪ Acq
Slide 11: EASTMAN and EZ-FLO Product Overview
EASTMAN and EZ-FLO Product Overview 90+ Year Professional Brand EASTMAN EASTMAN Installation Connectors Products and Outlet Stop Valves Appliance Floor Pans Expansion Tank Boxes 20% of 50% of Steam Dryer Dishwasher Ice Maker Washing Machine Sales Sales1 Electrical Water Heater Pans 35+ Year Brand Le
Slide 12: EZ-FLO customer proposition strongly aligned with RWC
EZ-FLO customer proposition strongly aligned with RWC Delivering high quality products at an attractive value Small proportion of High cost of High-quality High service Strong brand project costs failure products level affinity Small proportion of overall cost Intrinsic benefits to Distributors & En
Slide 13: Operations Overview
Operations Overview In-house China Manufacturing China Free Trade Zone Warehouse US Network of 7 Warehouses Ningbo Facility – automated manufacturing Ningbo Facility – integrated distribution Las Vegas NV warehouse facility ▪ ISO-Certified plant in China ▪ Bonded warehouse consolidates ▪ “Hub an
Slide 14: In-house China Manufacturing
In-house China Manufacturing China manufacturing facility was opened in 2003 in Ningbo Appliance and water supply lines manufacturing ▪ ISO-Certified plant, located adjacent to bonded warehouse ▪ Manufactures both EASTMAN branded and OEM/private label products ▪ Automated PVC extrusion lines for f
Slide 15: China Free Trade Zone Warehouse
China Free Trade Zone Warehouse Ningbo is a cost competitive location that efficiently manages tariffs and shipping costs ▪ EZ-FLO has long-standing China/Asia supply base for both purchased products and raw materials ▪ Opportunity to leverage supplier relationships to lower RWC costs on selected
Slide 16: China operational profile
& China operational profile EZ-FLO’s operational profile is consistent with RWC’s approach ▪ EZ-FLO’s manufacturing plant and warehouse are leased from a government authority • Annual lease renewed based on comprehensive evaluation results of Ningbo Bonded Zone with rankings of A-D • EZ-FLO is c
Slide 17: US Network of Warehouses
US Network of 7 Warehouses EZ-FLO and RWC distribution footprint will improve customer service California Florida North Carolina New Jersey Texas Nevada Indiana ▪ EZ-FLO has extensive distribution footprint with 7 US Distribution Centres (“DC”), 5 leased and 2 owned EZ-FLO delivery timeframes ▪ Fu
Slide 18: Customer Overview
Customer Overview Retail Wholesale Americas Ex-USA OEM / Private Label 49% of Sales 29% of Sales 11% of Sales 11% of Sales 18
Slide 19: Integration Plan
Integration Plan 19
Slide 20: Integration Plan
Integration Plan A detailed integration plan has been developed for “Day 1” and longer term integration Overview ▪ Detailed due diligence has been led by the RWC Americas team, supported by broader RWC resources ▪ Strong team in place at RWC to lead integration effort ▪ EZ-FLO has a strong and prove
Slide 21: Financial Metrics
Financial Metrics 21
Slide 22: EZ-FLO Financial Snapshot
EZ-FLO Financial Snapshot 3-year revenue growth of 10%+ p.a. in FY16 - FY19. Strong execution to meet COVID demand and product/customer initiatives drove higher growth rates in FY20 and FY21 Annual Revenues $m1 Adjusted EBITDA $m1 200 35 EZ-FLO 30 150 169 Financial Years 147 25 27.0 25.9 ended 31 Oc
Slide 23: Synergies
Synergies 23
Slide 24: Synergy Realisation
Synergy Realisation Significant revenue and cost synergies identified Revenue: EZ-FLO offers significant top-line growth opportunities, expected to yield 10% p.a. EZ-FLO sales growth ▪ Pursue further Appliance Installation programmes across Retail and Wholesale channels ▪ Drive Gas Connector market
Slide 25: Example Revenue Synergy: Water Heater Installation
Example Revenue Synergy: Water Heater Installation Combined RWC and EZ-FLO will be powerhouse in water heater installation market ▪ EZ-FLO and RWC combined now have the full product range to offer 100% of products needed to support Water Heater installation ▪ Investments in China manufacturing have
Slide 26: Summary
Summary 26
Slide 27: Summary
Summary Strength of EZ-FLO’s growth pipeline combined with RWC’s go-to-market strengths will add significant top line potential through the next 3 – 5 years ▪ EZ-FLO is a logical acquisition for RWC Americas given its proximity to RWC’s products, key customers, and core competencies ▪ With the acqui
Slide 28: Q&A
Q&A
Slide 29: Appendix
Appendix 29
Slide 30: Key Appliance Connector Types
Key Appliance Connector Types Plumbed Appliances Gas Appliances Steam Dryer Dishwasher Ice Maker Washing Machine Water Heaters Dryers & Fan Ducting Connectors 30
Slide 31: In-Store Merchandising
In-Store Merchandising ] STAINLESS STEEL | Sfotiye MACHINE CONNECT Help PROTECT Your Home From Water Damage FLOOD | ADE RIGHT. MADE TO LAST. 31
Slide 32: Acquisition of EZ-FLO International
Acquisition of EZ-FLO International Investor Presentation October 2021 RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877 32
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