Slide 1: 2018 Full Year Results Presentation
2018 Full Year Results Presentation 31 August 2018
Slide 2: Disclaimer
Disclaimer Important Notice and Disclaimer 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
Slide 3: Our purpose
Our purpose To improve the lives of our customers and our people by striving for greatness every day. Daily mantra Strive for greatness every day. 3 2018 AGM Full Year Results Presentation 2018 The Reece Group - Works for you
Slide 4: Contents
Contents Financial Recap of Operational FY18 Financial MORSCO Highlights Highlights Performance acquisition 4 2018 Full Year Results The Reece Group - Works for you
Slide 5: Financial Highlights
Financial Highlights 5 2018 Full Year Results The Reece Group - Works for you
Slide 6: FY18 Highlights
FY18 Highlights Sales Revenue EBITDA 10.7% to $2,689 million 5.4% to $378 million NPAT Dividend per share 6.1% to $225 million 1.3% to 20.25 cps 6 2018 Full Year Results The Reece Group - Works for you
Slide 7: Sales Revenue (A$2,689m)
Financial Highlights FY17 - $2,429m Sales Revenue (A$2,689m) FY18 - $2,689m CAGR 10.7% 10.9% Column1 $2,429 $2,689 $2,276 $2,085 $1,776 ■ Record sales result ■ Strong performance in underlying business ■ Building activity solid FY14 FY15 FY16 FY17 FY18 7 2018 Full Year Results The Reece Group - Work
Slide 8: EBITDA (A$378m)
Financial Highlights FY17 - $357m EBITDA (A$378m) FY18 - $378m CAGR 13.6% 5.4% Column1 $331 $357 $378 $280 $227 ■ Investment in people to support growth ■ Invested in technology and innovation FY14 FY15 FY16 FY17 FY18 8 2018 Full Year Results The Reece Group - Works for you
Slide 9: NPAT (A$225m)
Financial Highlights FY17 - $212m NPAT (A$225m) FY18 - $225m CAGR 16.2% 6.1% $225 $212 $192 $166 $123 ■ Record NPAT result FY14 FY15 FY16 FY17 FY18 9 2018 Full Year Results The Reece Group - Works for you
Slide 10: Dividends (cps)
Financial Highlights FY17 – 20cps Dividends (cps) FY18 – 20.25cps CAGR 12.2% 1.3% 18.40 20.00 20.25 15.20 12.80 ■ Total dividend declared for FY 2018 of 20.25 cents per share ■ Final dividend of 14.25 cents per share FY14 FY15 FY16 FY17 FY18 10 2018 Full Year Results The Reece Group - Works for you
Slide 11: Underlying Australian economic indicators remain supportive
Underlying Australian economic indicators remain supportive Dwelling Approvals Dwelling Completions 219 217 214 (000’s) 230 238 230 (000’s) 192 202 222 199 162 161 176 150 151 146 148 168 165 149 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Alte
Slide 12: Operational Highlights
Operational Highlights 12 2018 Full Year Results The Reece Group - Works for you
Slide 13: Three focus areas in 2018
Three focus areas in 2018 Customer > Innovate & Digitise > MORSCO 13 2018 Full Year Results The Reece Group - Works for you
Slide 14: Customer Highlights: Outlets
Customer Highlights 9 +28 118 OUTLETS 53 44 185 19 172 15 *2019 acquisitions not included 14 2018 Full Year Results The Reece Group - Works for you
Slide 15: Continue to deliver market leading products
Customer Highlights Continue to deliver market leading products 15 2018 Full Year Results The Reece Group - Works for you
Slide 16: World class NPS
Customer Highlights WORLD CLASS NPS 65 64 61 51 54 54 49 43 35 F10 F11 F12 F13 F14 F15 F16 F17 F18 16 2018 Full 2018 Year Full Results Year Results The Reece Group - Works for you
Slide 17: Three focus areas in 2018
Three focus areas in 2018 Customer > Innovate & Digitise > MORSCO 17 2018 Full Year Results The Reece Group - Works for you
Slide 18: Design and Innovation Centre, Next.
Digitise and Innovate Next Innovation capability Design and & culture Innovation Centre, Next. Trout Unique brand Superseed New growth experiences opportunities 18 2018 Full Year Results The Reece Group - Works for you
Slide 19: Digitise and Innovate
Digitise and Innovate Layout Incubate an Layout Manage an Layout Disrupt an 19 2018 Full Year Results The Reece Group - Works for you
Slide 20: Core systems + Online = Digitised Reece
Digitise and Innovate + + = Core systems Online Integration Digitised Reece 20 2018 Full Year Results The Reece Group - Works for you
Slide 21: Digitise and Innovate
Digitise and Innovate 21 2018 Full Year Results The Reece Group - Works for you
Slide 22: Deliver the Reece Support Centre of the future
Digitise and Innovate Deliver the Reece Support Centre of the future 22 2018 Full Year Results RLT September 2018 The Reece Group - Works for you
Slide 23: Three focus areas in 2018
Three focus areas in 2018 Customer > Innovate & Digitise > MORSCO 23 2018 Full Year Results The Reece Group - Works for you
Slide 24: MORSCO
MORSCO ■ Strategic platform in the growing US Sun Belt region ■ Access to large, growing markets with strong demand drivers ■ Experienced management team with proven track record ■ Ability to leverage operational expertise and relationships ■ Significant opportunity to drive future organic and acqui
Slide 25: About MORSCO
MORSCO About MORSCO • 16 States • 171 Branches • 2,500 Employees Plumbing branch Waterworks branch HVAC branch 25 2018 Full Year Results The Reece Group - Works for you
Slide 26: Creating a A$5.0bn sales plumbing, HVAC-R and waterworks distribution business
MORSCO Creating a A$5.0bn sales plumbing, HVAC-R and waterworks distribution business $2.3bn $5bn $2.7bn Reece MORSCO MergeCo + MORSCO total sales in A$m 26 2018 Full Year Results The Reece Group - Works for you
Slide 27: Positive momentum sustained in US market
Positive momentum sustained in US market Single and multi-family housing starts 2006 – 2020E Leading indicator of remodeling activity – Q1 2018 $425 10% (‘000’s) Single Family Multi-Family Homeowner improvements four-quarter moving totals ($bn) US Census Bureau four qtr rate of change $400 Projectio
Slide 28: Contents and agenda
Contents and agenda Financial Recap of Operational FY18 Financial MORSCO Highlights Highlights Performance acquisition Peter Wilson, CEO & MD Gavin Street, CFO 28 2018 Full Year Results The Reece Group - Works for you
Slide 29: FY18 Financial Performance
FY18 Financial Performance 29 2018 Full Year Results The Reece Group - Works for you
Slide 30: Results summary
FY18 Financial Performance Results summary ■ FY18 was a record sales and profit result Var. June year end (A$m) FY18A FY17A (%) ■ Strong performance in a market that has Net sales $2,689 $2,429 10.7 been resilient EBITDA $378 $359 5.4 ■ Completion of acquisitions EBIT $324 $309 5.0 ■ Continued inves
Slide 31: Cash Flow
FY18 Financial Performance Cash Flow Var. June year end (A$m) FY18A FY17A (%) EBITDA 378 359 5.4 Historical cashflow from operations Column1 (FY14A–FY18A) Net movements in working capital (91) (44) 108.5 Non-cash items in EBITDA 7 3 128.4 $215 Income Tax Paid (109) (98) 11.1 $190 $181 Finance Costs
Slide 32: Balance Sheet Net debt
FY18 Financial Performance Balance Sheet Net debt As at 30 As at 31 June year end (A$m) 540 June 2018 Dec. 2017 Cash and cash equivalents 540 50 Total debt 0 100 Net debt (540) 50 FY18 EBIT / 148 56.7 55.6 Net finance costs ■ Balance sheet used to fund FY18 acquisitions in 2 Australia and NZ -40 ■ E
Slide 33: FY18 Summary
FY18 Summary World-class Innovation and Acquisition of Strong financial Investing in customer digitisation focus MORSCO position the future experience 33 2018 AGM Full Year Results Presentation 2018 The Reece Group - Works for you
Slide 34: Q&As
Q&As 34 2018 Full Year Results The Reece Group - Works for you
Slide 35: Thank you
Thank you 35 2018 Full Year Results The Reece Group - Works for you