Gwa Group Limited · ASX:GWA
Gwa — FY2020 Earnings Presentation
35 slides from Gwa's earnings presentation, Aug 17, 2020
Slide 1: Annual Results Presentation ASX cover letter
17 August 2020 ASX On-Line Manager Company Announcements Australian Securities Exchange Dear Sir Annual Results Presentation for the Year Ended 30 June 2020 We enclose the following document for immediate release to the market. • Annual Results Presentation On 17 August 2020 at 10:00am (AEST), GWA w
Slide 2: Results Presentation Year ended 30 June 2020
Superior Solutions for Water Results Presentation Year ended 30 June 2020 17 August 2020
Slide 3: Disclaimer
Disclaimer 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 subjective
Slide 4: Overview
01 | Overview 3|G GWA Group Limited
Slide 5: Disciplined performance in challenging markets
Overview Financial results Strategic progress Outlook Appendix Disciplined performance in challenging markets Operational discipline mitigates significant amount of revenue decline from weaker market and COVID-19 ‒ Merchant destocking in 1H FY20 and COVID-19 restrictions in 2H FY20 significantly imp
Slide 6: COVID-19 response: strongly positioned to manage through pandemic
Overview Financial results Strategic progress Outlook Appendix COVID-19 response: strongly positioned to manage through pandemic Primary focus remains on health and safety of all people at GWA (staff and visitors) ‒ Enhanced safety protection (sanitiser, masks, temperature checks and increased clean
Slide 7: COVID-19 restrictions impacted Q4 revenue
Overview Financial results Strategic progress Outlook Appendix COVID-19 restrictions impacted Q4 revenue Revenue vs pcp Impact of restrictions H1 Q3 Q4 H2 Australia ‒ 1H impacted by significant merchant destocking and weaker market conditions -2.7% -11.0% ‒ Q3 revenue was broadly in line with pcp -1
Slide 8: Good 2H momentum in three of our top five customers
Overview Financial results Strategic progress Outlook Appendix Good 2H momentum in three of our top five customers GWA sales in top 51 customers (Australia) - revenue vs pcp (pro forma) Customer A Customer B Customer C H1 Q3 Q4 H2 H1 Q3 Q4 H2 H1 Q3 Q4 H2 14.9% 12.8% 13.8% 7.3% 2.9% 5.0% 4.5% 0.8% -2
Slide 9: GWA maintains share in challenging market
Overview Financial results Strategic progress Outlook Appendix GWA maintains share in challenging market Market Data¹ Market Segment ‒ Despite challenging market GWA Australia has held FY20 vs FY19 C ha nge v s prio r c o rre s po nding pe rio d market share on a sales-out basis² Residential detache
Slide 10: Financial results
02 | Financial results |G Srp nies | meTHVEN | cose « | dorf
Slide 11: Operational discipline helps mitigate revenue decline
Overview Financial results Strategic progress Outlook Appendix Operational discipline helps mitigate revenue decline Normalised¹ from continuing operations² (pro forma) includes Methven in FY20 and full year FY19 Normalised¹ Continuing Operations EBIT Bridge (A$M) ‒ Volume/Mix: impacted by market de
Slide 12: Operational discipline helps mitigate revenue decline
Overview Financial results Strategic progress Outlook Appendix Operational discipline helps mitigate revenue decline Normalised¹ from continuing operations² (pro forma) includes Methven in FY20 and full year FY19 Normalised¹ Continuing Operations EBIT Bridge (A$M) ‒ Revenue down 12% reflects residen
Slide 13: Operational discipline to manage weak markets
Overview Financial results Strategic progress Outlook Appendix Operational discipline to manage weak markets Normalised¹ from continuing operations² (pro forma) includes Methven in full year FY19 Pro Forma ‒ Revenue reflects the decline in residential FY19 FY20 A$m Normalised¹ Includ es M et hven In
Slide 14: Normalised from continuing operations – revenue up 4.4%
Overview Financial results Strategic progress Outlook Appendix Normalised from continuing operations – revenue up 4.4% Normalised¹ from continuing operations² includes Methven from 10 April in FY19 FY19 FY20 ‒ Revenue growth of 4.4% due to the A$m Normalised¹ Includ es M et hven Includ es M et hven
Slide 15: Strong cash conversion maintained
Overview Financial results Strategic progress Outlook Appendix Strong cash conversion maintained Pro Forma ‒ Continued focus on strong cash management Cash flow from Continuing FY19 FY20 Operations A$M Includ es M et hven f o r f ull year Includ es M et hven f o r f ull year ‒ Cash conversion from o
Slide 16: Strong financial position maintained despite COVID-19
Overview Financial results Strategic progress Outlook Appendix Strong financial position maintained despite COVID-19 Metrics1 30 June 30 June 30 June 30 June 30 June ‒ GWA remains in a strong financial position to operate 2016 2017 2018 2019 2020 through current challenging environment Net Debt 88.4
Slide 17: Strategic progress
03 | Strategic progress 16|G Srp nies | meTHYEN | cise | dorf
Slide 18: GWA evolving strategy for growth
Overview Financial results Strategic progress Outlook Appendix GWA evolving strategy for growth PURPOSE: We make life better through products, services and technologies that create superior solutions for people to enjoy and sustain water, our planets’ most precious resource. GOAL: We use our fixture
Slide 19: Continued focus on superior solutions for water
Overview Financial results Strategic progress Outlook Appendix Continued focus on superior solutions for water FY21 A strong resilient business Australia Asia • Extend Australian share • Strengthen GWA foothold in key leadership by shifting growth region investment to “winning” • Develop superior lo
Slide 20: Building R&R market share in ANZ
Overview Financial results Strategic progress Outlook Appendix Building R&R market share in ANZ Consumer engagement ‒ Increased upfront engagement with Caroma website traffic increasing by 23% in 2H FY20 ‒ Combined monthly social media reach of ~800k hits New product launches ‒ Caroma Elvire premium
Slide 21: Extend ANZ leadership position in Commercial segment
Overview Financial results Strategic progress Outlook Appendix Extend ANZ leadership position in Commercial segment ‒ Commercial forward order book remains strong at 16% ahead of the corresponding period last year, through: ‒ Strong traction in Aged Care ‒ Share growth in the declining Multi-res seg
Slide 22: Strong market support for Caroma Smart Command
Overview Financial results Strategic progress Outlook Appendix Strong market support for Caroma Smart Command® Progress ‒ Strong customer engagement in multiple commercial segments not only surrounding the system’s water saving technology but also its enhanced hygiene and touchless applications ‒ Ca
Slide 23: Continued progress on Methven integration
Overview Financial results Strategic progress Outlook Appendix Continued progress on Methven integration opening up overseas growth opportunities ‒ Integrated sales structure now implemented and providing improved ranging of 7% Methven products in the Australian merchant channel ‒ Consolidation of d
Slide 24: Summary and outlook
04 | Summary and outlook 23|G GWA Group Limited
Slide 25: FY21 outlook
Overview Financial results Strategic progress Outlook Appendix FY21 outlook¹ Key area FY21 commentary ‒ Trading in July 2020 is slightly ahead of pcp. However, trading is expected to remain very challenging in FY21 due to weak construction market conditions further exacerbated by Market Activity unc
Slide 26: Results Presentation Year ended 30 June 2020
Superior Solutions for Water Results Presentation Year ended 30 June 2020 17 August 2020
Slide 27: Appendix
05 | Appendix 26|G GWA Group Limited METHVEN
Slide 28: FY21 Key Assumptions
Overview Financial results Strategic progress Outlook Appendix FY21 Key Assumptions1 Area Assumption Australian market backdrop BIS total building activity data2 is indicating a (7)% market decline in FY21 Customer stock on hand Not expecting any significant customer de/restocking in FY21 Price incr
Slide 29: IFRS 16 Leases - impact on key metrics
Overview Financial results Strategic progress Outlook Appendix IFRS 16 Leases - impact on key metrics Normalised¹ from continuing operations² (pro forma) includes Methven in full year FY19 FY19 FY20 Inc lude s M e t hv e n Inc lude s M e t hv e n A$m Previously Restated IFRS 16 Pre IFRS 16 Post IFRS
Slide 30: Reconciliation – Reported NPAT to Normalised NPAT
Overview Financial results Strategic progress Outlook Appendix Reconciliation – Reported NPAT to Normalised¹ NPAT FY19 FY20 A$m Continuing Discont'd Group Continuing Discont'd Group Operations² Operations Total³ Operations² Operations Total³ Normalised¹ REVENUE 381.7 0.0 381.7 398.7 0.0 398.7 EBITDA
Slide 31: Increased presence in R&R segment and improved geographic diversification
Overview Financial results Strategic progress Outlook Appendix Increased presence in R&R segment and improved geographic diversification provide resilience through the cycle Segment Category Resi Basins, Sinks, Valves 1% 18% Tubs & Baths 19% Resi R&R Multi-Resi Sanitaryware 10% 44% R&R 59% Comm R&R1
Slide 32: Existing housing turnover has declined significantly in FY20
Overview Financial results Strategic progress Outlook Appendix Existing housing turnover has declined significantly in FY20 70 60 50 '000s per month 40 30 20 10 0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Number of dwelling sales, Australia Trend (Number of dwelli
Slide 33: Number of loans, per month
Overview Financial results Strategic progress Outlook Appendix Number of loans for construction and purchase of new dwellings 8,500 8,000 Number of loans, per month 7,500 7,000 6,500 6,000 5,500 5,000 32 Source: ABS
Slide 34: Annual net overseas migration & Australian population growth
Overview Financial results Strategic progress Outlook Appendix Annual net overseas migration & Australian population growth Annual net overseas migration & Australian population growth 350 2.5 300 2.0 250 1.5 200 150 1.0 100 0.5 50 0 0.0 Annual net overseas migration ('000s) Australian population gr
Slide 35: Results Presentation
Superior Solutions for Water Results Presentation Year ended 30 June 2020 17 August 2020