Slide 1: FY22 Investor Presentation
ASX Announcement 23 August 2022 FY22 Investor Presentation Attached for release is Reece Limited’s results presentation for the 12 month period ended 30 June 2022. For further information contact: Siobhan Weaver Investor Relations E: siobhan.weaver@reece.com.au T: 0477 480 813 Chloe Dougherty Media
Slide 2: Full Year Results 2022
Full Year Results 2022 12 months ended 30 June 2022
Slide 3: Disclaimer
Reece Group – Full Year Results 2022 2 Disclaimer The material in this presentation has been prepared by Reece Limited (ABN 49 004 313 133) (“Reece") (ASX:REH) and is general background information about Reece's activities current as at the date of this presentation. The information is given in summ
Slide 4: Presenters
Reece Group – Full Year Results 2022 3 Presenters Peter Wilson Andrew Cowlishaw Group Chief Group Chief Executive Officer Financial Officer
Slide 5: What we'll share today
Reece Group – Full Year Results 2022 4 What we’ll share today 01 02 03 HY22 summary FY22 Our focus Operational overview overview 04 05 06 FY22 Financial Outlook Summary Performance
Slide 6: Navigating a challenging environment in FY22
Reece Group – Full Year Results 2022 5 Navigating a challenging environment in FY22 Focused on team and customer Flexible model to spread demand on network, focus on maintaining customer promise Increased inventory, prioritised being in stock for customers Focused on safe environment, supporting tea
Slide 7: Financial highlights
Reece Group – Full Year Results 2022 6 Financial highlights Strong result in a complex environment; significant inflation tailwind Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 22% up 16% up 17% up 37% up 37% to $7.7b to $838m to $578m to $392m to 61 cents ANZ US Net leverage ratio** Total FY22
Slide 8: Our focus
02 Our focus
Slide 9: Our Blueprint
Reece Group – Full Year Results 2022 8 Our Blueprint Inspired Live the Embrace Execute Deliver by our Reece our 2030 Strategic Customer Purpose Way Vision Priorities Promise
Slide 10: Our Blueprint
Reece Group – Full Year Results 2022 9 Our Blueprint Inspired Live the Embrace Execute Deliver by our Reece our 2030 Strategic Customer Purpose Way Vision Priorities Promise Our purpose and We will be the Brilliant Customised To improve the lives service of our customers values guide our trade's mos
Slide 11: Strategy translates to long term regional opportunities
Reece Group – Full Year Results 2022 10 Strategy translates to long term regional opportunities Australia & New Zealand United States • Market leader • Large, highly fragmented and growing market • Robust long term market prospects • Opportunity to create differentiated • Strong focus on less cyclic
Slide 12: ANZ Operational Overview
—e SSS f/m. EE As iN = 1 aa _2. a Me Th a i ee | a Operational Overview
Slide 13: Strong execution to manage macro challenges
Reece Group – Full Year Results 2022 12 Strong execution to manage macro challenges Brilliant Investing for Delivering Fundamentals Growth Innovation • Focused on • Network upgrades; • Progressing innovation ANZ store refurbishment initiatives; focus on fundamentals, strategy and culture in complex
Slide 14: Supporting our people and refreshing our strategic focus
Reece Group – Half Year Results 2022 13 13 Brilliant Fundamentals Supporting our people and refreshing our strategic focus Focused on our team in a year of disruption
Slide 15: Australia & New Zealand network
Reece Group – Full Year Results 2022 14 Brilliant Fundamentals Australia & 11 New Zealand network 645 Branches 122 51 180 44 Network density enabled a 184 flexible approach to delivering 38 customer promise despite disruption in FY22 15
Slide 16: Delivering market leading products for customers
Reece Group – Half Year Results 2022 15 Brilliant Fundamentals Delivering market leading products for customers od o c pr sed e tb uc n ba ag c Im t tb e ag Im Inspiration for consumers More sustainable products Outstanding quality • Mizu sensor basin mixer provides new • Thermann split heat pump de
Slide 17: Enabling innovation & collaboration
Reece Group – Half Year Results 2022 16 Delivering Innovation Enabling innovation & collaboration Continued focus on delivering innovation for trade of the future Moved to purpose built support centre, The Works, to drive innovation and collaboration
Slide 18: Operational Overview US
Operational Overview US
Slide 19: Reflecting on four years in the US
Reece Group – Full Year Results 2022 18 Reflecting on four years in the US Strategic rationale when announced in 2018 ü Strategic platform ü Access to large, ü Experienced ü Ability to leverage ü Significant in the growing US growing markets management team operational opportunity to drive Sun Belt
Slide 20: Considered approach to establishing a long term US platform
Reece Group – Full Year Results 2022 19 Considered approach to establishing a long term US platform 1 2 3 4 What we Listen Adopt Leverage Get the said we and learn ‘Best of breed’ relationships & basics right would do approach local team What we • Built deep local • Trialled new branch • Combined ‘l
Slide 21: Moving to a single Reece brand
Reece Group – Full Year Results 2022 20 20 Investing for Growth Moving to a single Reece brand Local Reece presence a symbolic milestone Physical network rebrand commencing in California
Slide 22: FY22: early stages of executing of a long-term strategy
Reece Group – Full Year Results 2022 21 FY22: early stages of executing of a long-term strategy Brilliant Investing for Delivering Fundamentals Growth Innovation • Embedding culture, • Progressed network • Initial focus on building out training and investment program first two development program (r
Slide 23: US network
Reece Group – Full Year Results 22 Investing for Growth US network 204 Branches
Slide 24: FY22 Financial performance
04 FY22 Financial performance
Slide 25: Group performance
Reece Group – Full Year Results 2022 24 Group performance 1 Step up in long term 700 8,000 investment strategy 600 7,000 2 Strategic investment 6,000 500 in net working capital 5,000 Sales revenue ($m) 400 EBIT ($m) 4,000 300 3,000 3 Pricing discipline – selling the Reece way 200 2,000 100 1,000 Sol
Slide 26: Financial highlights
Reece Group – Full Year Results 2022 25 Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 22% up 16% up 17% up 37% up 37% to $7.7b to $838m to $578m to $392m to 61 cents from $6.3b from $720m from $493m from $286m 15 cents per 22.5 cents per Normalised down 50bps Net Final share
Slide 27: ANZ performance
Reece Group – Full Year Results 2022 26 ANZ performance FY22 • Sales up 12% due to demand and 30 June 2022 1HY 2HY FY22 FY21 Var. % FY20 inflation (AU$m) • Estimated product inflation dynamic H2 9% (H1 8-9%) Sales revenue 1,733 1,785 3,518 3,154 11.5% 2,888 • Adjusted EBITDA margin compression of 15
Slide 28: US performance
Reece Group – Full Year Results 2022 27 US performance USD FY22 HY1 HY2 FY22 FY21 Var. % FY20 30 June 2022 (US$m) • Sales up 28% on USD basis Sales revenue 1,364 1,622 2,986 2,333 28.0% 2,094 • Estimated product inflation dynamic H2 circa 20% (H1 low-mid teens) Normalised EBITDA* 108 118 226 163 38.
Slide 29: Cashflow
Reece Group – Full Year Results 2022 28 FY22 FY22 FY21 30 June 2022 (A$m) Normalised EBITDA* 838 720 Net movements in working capital (incl. FX) (412) (152) Non-cash items in EBITDA 4 (2) Income tax paid (144) (119) Finance costs (42) (75) Cashflow Lease interest paid (22) (20) Cash inflow from oper
Slide 30: Areas of strategic investment
Reece Group – Full Year Results 2022 29 Areas of strategic investment Net working capital Capital expenditure Repayment of debt • Strategic investment • 2.6% of sales (FY21:1.1%) • Fully repaid Term Loan B in inventory • Invest through the cycle • Drawdown new syndicated • Anticipate to remain multi
Slide 31: Strong balance sheet
Reece Group – Full Year Results 2022 30 Strong balance sheet FY22 30 June 2022 (A$m) FY22 FY21 Cash 220 829 Trade and other receivables 1,368 1,044 Inventories 1,528 1,138 Net leverage ratio* Other current assets 7 1 1.2x Total current assets PPE and leases 3,123 1,493 3,012 1,257 Intangible assets
Slide 32: Outlook
05 Outlook
Slide 33: Complex macro environment
Reece Group – Full Year Results 2022 32 Complex macro environment Constrained supply chain Persistent inflation Mixed demand outlook Low labour availability Consumer sentiment weakening Rising interest rates Capacity constraints Strong consumer Structural shift Recession risks rising balance sheets
Slide 34: Reece well placed to navigate complex environment
Reece Group – Full Year Results 2022 33 Reece well placed to navigate complex environment Diversified business A trusted brand Clear track record 1 with a differentiated customer proposition 2 100 years of growing through the cycle 3 By geography, segment, customer; focused on resilient R+R Large ma
Slide 35: Chair Transition
Reece Group – Full Year Results 2022 34 “I love what I do and look forward to continuing to help drive the success of Chair Transition this great business.” Alan Wilson, currently Executive Chair, to transition to Executive Director role from 1 September Will continue to share expertise and mentor t
Slide 36: Summary
06 Summary
Slide 37: Summary
Reece Group – Full Year Results 2022 36 Summary Strong Long-term Investing for Result Focus the Future
Slide 38: Reece Group
reece group"
Slide 39: Supplementary information
Reece Group – Full Year Results 2022 38 Supplementary information
Slide 40: Reconciliation of normalisations
Reece Group – Full Year Results 2022 39 Reconciliation of normalisations Normalised EBITDA Adjusted EBITDA – ANZ Adjusted NPAT FY22 FY22 FY22 FY22 FY22 FY22 30 June 2022 (AU$m) 30 June 2022 (AU$m) 30 June 2022 (AU$m) EBIT (statutory) 578 Normalised EBITDA 526 NPAT (statutory) 392 Add back: Deduct no
Slide 41: FX impact on sales
Reece Group – Full Year Results 2022 40 FX impact on sales 8,000 147 7,654 3,989 7,000 6,000 5,000 4,000 3,518 3,000 2,000 1,000 - ANZ Sales US Sales FX impact FY22 Sales