Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — HY24 Earnings Presentation
24 slides from Reliance Worldwide's earnings presentation, Feb 19, 2024
Slide 1: FY24 Interim Results Presentation
FY24 Interim Results Presentation 19 February 2024 RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877
Slide 2: Important Notice
Important Notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (19 February 2024). It is information given in summary form and does not purport to be complete. The presentation is not an offer or invitation for su
Slide 3: HY24 Overview
HY24 Overview Repair and maintenance resilient, Group operating margins stable Strong financial performance ▪ Strong sales performance in the Americas driven by new product initiatives ▪ Group operating margins stable, aided by cost management ▪ Americas operating margin improvement ▪ EMEA cost savi
Slide 4: HY24 Financial Highlights
HY24 Financial Highlights All figures in US$ Net sales Adjusted EBITDA Adjusted NPAT $589.5 million $124.8 million $ 67.7 million -2% on pcp1 -3% on pcp +0.3% on pcp Cash generated from operations Net leverage ratio3 Interim dividend $ 151.6 million 1.56x US 2.25 cps On market share buyback +61% ver
Slide 5: HY24 Performance Summary
HY24 Performance Summary US$ million HY24 HY23 % Change Commentary ▪ Net sales 2% lower than pcp: Net Sales 589.5 601.3 (2%) ▪ Largely driven by lower volumes in EMEA, and to a 1 Adjusted EBITDA 124.8 128.1 (3%) lesser extent APAC Adjusted EBITDA margin (%) 21.2% 21.3% (10bps) ▪ Americas sales were
Slide 6: HY24 Adjusted EBITDA
HY24 Adjusted EBITDA Cost reduction actions offset lower volumes, EBITDA margin broadly stable on pcp US$m Commentary -3% ▪ Adjusted EBITDA down 3% -5% ▪ Constant currency Adjusted EBITDA down 5% ▪ Adjusted EBITDA margin broadly stable, only 10bps lower than pcp despite lower volumes in APAC and EME
Slide 7: Segment results: Americas
Segment results: Americas Sales in line with pcp, EBITDA higher due to transfer of manufacturing from APAC Commentary Americas ▪ Sales performance reflected revenue growth from new US$m HY24 HY23 % Change product initiatives: Net Sales 426.4 427.3 0% ▪ SharkBite Max Adjusted EBITDA1, 2 85.0 71.6 19%
Slide 8: Segment results: Asia Pacific
Segment results: Asia Pacific Transfer of SharkBite manufacturing to the US impacted volumes Asia Pacific Commentary A$m HY24 HY23 % Change ▪ External sales down 4% Net Sales 121.0 153.6 (21%) ▪ Australia sales impacted by decline in new housing commencements – down 15% in year to 30 Sept 232 Adjust
Slide 9: Segment results: EMEA
Segment results: EMEA Lower volumes impacted operating margins EMEA Commentary £m HY24 HY23 % Change ▪ EMEA external sales down 12% on pcp in local currency Net Sales 101.4 108.7 (7%) ▪ UK external sales down 9% on pcp driven by lower Adjusted EBITDA1, 2 29.2 34.7 (16%) volumes Adjusted EBITDA margi
Slide 10: Cash flow from operations up 61%
Cash flow from operations up 61% Cash flow performance Commentary US$m HY24 HY23 ▪ Cash generated from operations up 61% Adjusted EBITDA 124.8 128.1 ▪ Lower working capital mainly due to inventory reductions ▪ Operating cash flow conversion 121% Cash generated from operations 151.6 94.3 Operating ca
Slide 11: Net debt reduced by $138.8m
Net debt reduced by $138.8m Debt metrics Commentary US$m 31-Dec-23 31-Dec-22 ▪ Net debt decreased by $138.8m since 31 Dec 2022 Cash and cash equivalents 27.2 34.9 ▪ Total committed debt facilities of $1,050M: Gross debt 421.9 568.4 ▪ Unutilised committed facilities of $628m Net debt1 394.7 533.5 ▪ W
Slide 12: Revised shareholder distribution policy
Revised shareholder distribution policy Changes to be applied for HY24 ▪ Review of distribution policy settings undertaken due to reduced capacity to generate franking credits going forward ▪ The following changes are to be introduced: ▪ RWC still intends to distribute between 40% and 60% of annual
Slide 13: FY24 Outlook: guidance maintained
FY24 Outlook: guidance maintained1 Group Prior Guidance Current Guidance Status Net Sales Down low to mid-single digits on FY23 Unchanged Operating Margin Group EBITDA margin stable on FY23 Unchanged Operating Cash Flow Operating cash flow conversion of 90%+ 2nd Half operating cash flow conversion o
Slide 14: Our Focus for 2024
Our Focus for 2024 Position RWC to reap benefits of a stronger, leaner business as demand increases People, Safety & Execution Growth Culture Manage cost base in EMEA to Continue to execute on new product Everyone safe every day: preserve margins despite lower initiatives including SharkBite Max, de
Slide 15: Acquisition of Holman Industries: Overview
Acquisition of Holman Industries: Overview Leading manufacturer and distributor of branded plumbing and watering products in Australia Transaction overview ▪ RWC to acquire Holman Industries for A$1601 million; completion expected to occur in March 2024 ▪ Acquisition values business at a multiple of
Slide 16: Holman acquisition will expand and diversify APAC business
Holman acquisition will expand and diversify APAC business Holman’s product portfolio ▪ Holman’s plumbing products portfolio complements RWC water-in portfolio with water-out products will complement RWC’s ▪ Additional product ranges will double RWC’s Target Addressable Market in Australia offering
Slide 17: Appendix
Appendix lumbing Matters. We Make It Better.
Slide 18: RWC is a global growth-orientated building products company
RWC is a global growth-orientated building products company with defensive end-market exposures Global plumbing solutions in a large and Portfolio of plumbing solutions underpinned growing market FY23 by in-house R&D EBITDA Margin: 22.2% FY16 EBITDA Margin: 18.5% Track record of creating value from
Slide 19: Strategy Overview
Strategy Overview Creating value through product leadership Solutions for Value for the Industry leading the job site distributor execution Smart product solutions that improve Increasing value for the distributor Premium quality products and contractor productivity, enable the DIYer, while providin
Slide 20: Outlook: Americas
Outlook: Americas Leading Indicator or Remodelling Activity – Fourth Quarter 1 Demand Environment: ▪ Remodelling activity expected to decline by mid-single digits in 2024 (refer Leading Indicator of Remodelling Activity chart at left) ▪ Headwind of lower turnover of existing housing expected to pers
Slide 21: Outlook: Asia Pacific
Outlook: Asia Pacific Australian New Dwelling Demand Environment: Commencements1,2 ▪ Australia end-market exposure is 60% new housing, 200,000 40% repair, maintenance and remodel 150,000 15% decrease in ▪ 15% decline in Australia new dwelling commencements 100,000 new housing in 12 months ended 30 S
Slide 22: Outlook: EMEA
Outlook: EMEA UK New Orders for Construction: All New Housing Demand Environment: 4,250 (£m)1 ▪ Lower new home construction and weaker home 4,000 3,750 remodelling activity in UK likely to reduce plumbing and 3,500 heating sales 3,250 ▪ Demand for specialty products likely to be impacted by 3,000 2,
Slide 23: RWC's Capital Management approach
RWC’s Capital Management approach Capital management approach aims to minimise the cost of capital and ensure ongoing access to funding to meet future requirements Strong Financial Focus Value creation Capital management Improving long term Organic Capital Capital Consistent Capital Acquisitions mar
Slide 24: HY24 Adjustment Items
HY24 Adjustment Items HY24 Tax US$ million HY24 EBITDA HY24 EBIT HY24 NPAT Expense HY24 Reported 112.6 84.6 (18.6) 51.0 Adjusted for: Supply Smart closure of operations 9.8 9.8 (2.7) 7.1 EMEA restructure 2.4 2.4 (0.6) 1.8 Total one-off costs 12.2 12.2 (3.3) 8.9 Goodwill tax amortisation - - 7.8 7.8