Gwa Group Limited · ASX:GWA
Gwa — FY2023 Earnings Presentation
34 slides from Gwa's earnings presentation, Aug 14, 2023
Slide 1: FY2023 Full Year Results Presentation
14 August 2023 The Manager Company Announcements Office Australian Securities Exchange Dear Sir or Madam GWA Group Limited (GWA Group) – FY2023 Full Year Results Presentation Please find attached for immediate release to the market the FY2023 Full Year Results Presentation for GWA Group. On 14 Augus
Slide 2: GWA Results Presentation
GWA RESULTS PRESENTATION YEAR ENDED 30 JUNE 2023 > 14 AUGUST 2023
Slide 3: Our Presenters Today
OUR PRESENTERS TODAY Urs Meyerhans Calin Scott Craig Norwell Managing Director and CEO Group Chief Financial Officer Group Executive - Sales 2
Slide 4: Agenda
AGENDA 01 OVERVIEW 02 GROUP FINANCIAL RESULTS 03 BUSINESS PERFORMANCE 04 NEW PRODUCTS 05 STRATEGIC UPDATE 06 SUMMARY & FY24 OUTLOOK 07 Q&A APPENDIX 03
Slide 5: Overview
1 OVERVIEW
Slide 6: FY23 Headlines
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Agility and Strategy • FY23 a year of two halves o H1 strong until the latter part of CY22 o Responded quickly to a changing market dynamic o Resulting in improved EBIT and EBIT margin in H2 FY23 Head
Slide 7: Continued commitment to safety
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Continued commitment to safety • Focus on leading indicators - (worker insights) more than doubled in FY23 • ISO45001 re-certified • TIFR – 2 minor injuries in NZ in H1 Total Injury Frequency Rate Wor
Slide 8: Group Financial Results
GROUP 2 FINANCIAL RESULTS
Slide 9: Rapid response to softening market conditions limit the impact on Group results
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook A$m Normalised1 FY23 FY22 % Change Rapid response to softening market conditions limit Revenue 411.8 418.7 -1.6% the impact on Group results EBITDA 89.1 94.6 -5.9% EBIT 70.4 74.8 -6.0% • Normalised re
Slide 10: H2 Group underlying EBIT up 6.5% vs H1
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook A$m Normalised¹ 1H FY23 2H FY23 % Change FY23 H2 Group underlying EBIT up 6.5% vs H1: Revenue 207.1 204.7 -1.1% 411.8 EBITDA 43.4 45.7 5.5% 89.1 • H2 revenue increase in Australia and UK offset by dec
Slide 11: Cost control and price offset negative volumes and domestic customer freight
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Cost control and price offset negative volumes and domestic customer freight • Volume: largely reflects de-stocking by a customer in H1. Normalised¹ EBIT Bridge (A$M) • Price/Mix: Price increase ~5% i
Slide 12: Improved cash flow from operations and free cash flow
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Cash flow from Continuing Operations A$M FY23 FY22 EBITDA 89.1 94.6 Improved cash flow from operations Net movement in Working Capital 10.3 (43.9) and free cash flow: Other 0.2 (1.1) Cash Flow from Op
Slide 13: FY23 final dividend of 7.0c per share fully franked
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook FY23 final dividend of 7.0c per share fully franked 12
Slide 14: Solid financial position continues
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Solid financial position continues • Net debt down 15% from June 2022 due to working capital decrease; • Credit metrics within target ranges; • Banking facilities of $220m with headroom of $103m; • $1
Slide 15: Business Performance
BUSINESS PERFORMANCE ST wil!
Slide 16: Promising improvement in Q4 across AUS & UK
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Promising improvement in Q4 across AUS & UK FY23 Revenue Revenue commentary $ Revenue & % of Group AUD 1H FY23 2H FY23 Australia AUD $m $m 167.4 169.0 • Fast start impacted by economic conditions late
Slide 17: Revenue results by State (AU)
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Revenue results by State (AU) Mixed performance across Australia NSW o Strong start Q1, earlier impact of economic conditions late Q2 A$m Revenue FY23 FY22 ∆ LY % Change NSW 116.4 124.7 (8.2) -6.6% o
Slide 18: Seeing early signs of our 'Win the Plumber' focus gaining momentum
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Seeing early signs of our ‘Win the Plumber’ focus gaining momentum. Customer A vs PcP Customer B vs PcP 1HFY23 2HFY23 FY23 1HFY23 2HFY23 FY23 10.9% • The Good 4.2% o Continued solid performance in Com
Slide 19: New Products
NEW 4 PRODUCTS
Slide 20: Delivering NPD launches that are helping to complete our portfolio
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Delivering NPD launches that are helping to complete our portfolio. o Launch of stylish entry level tapware, showers and accessories collection - to grow share in builders and affordable housing marke
Slide 21: Strategy Update
extraordinary ~ today, and for tomorrow INNOVATE THROUGH, GROW OUR AFTER FOCUS ON STRATEGIC WINTHE PLUMBER | peSIGNS PARTNERSHIPS MARKETOFFERINGS | GROWTH OPPORTUNITIES, STRATEGY UPDATE Ss WP trvinormenta., SOCIAL, COVERNANCE A surtainable busines tat crve valve ad fel growth [B|) Auonen oncanisario
Slide 22: Excellent progress made on Strategy
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook Excellent progress made on Strategy. Key Performance Measures Progress • Win the Plumber Win the Plumber o 20,000+ plumbers signed up and categorized; 25,000 plumbers engaged o 6,700 plumbers engaged
Slide 23: Summary & FY24 Outlook
SUMMARY & 6 FY24 OUTLOOK
Slide 24: Summary
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook We responded to changing conditions in FY23 & are focused for disciplined execution in FY24. • FY23 - two very different halves o Responded quickly to the changing market conditions, delivering perfor
Slide 25: FY24 Outlook
Financial Business New Strategic Summary & Overview results performance Products focus FY24 Outlook FY24 OUTLOOK Key focus FY24 commentary • Commercial – increasing demand for new build in health and aged care and Commercial R&R. Key Markets • Residential detached – solid level of completions to con
Slide 26: Q&A
7 Q&A
Slide 27: Disclaimer
DISCLAIMER o 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 subjectiv
Slide 28: Appendix
8 APPENDIX
Slide 29: FY24 Key Assumptions
1 FY24 Key Assumptions Area Assumption Australian market backdrop BIS total building activity data2 is indicating a market decline of -8% in FY24 (constant prices) Price increase ~4% implemented in Australia from 1 April 2023 ~5% implemented in New Zealand from 1 March 2023 D&A (depreciation and amo
Slide 30: Continuing our strength in Sanitaryware
Continuing our strength in Sanitaryware. Segment Category Valves Basins, Sinks, Project Sub-Segment1 Tubs & Baths 2% 21% 18% Resi, 12% Multi-Res, 6% Sanitaryware 45% Builder 11% Commercial, Merchant R&R, 61% 21% 68% Taps & Showers 35% Geography Brand International Other 8% 17% New Zealand 10% Dorf 2
Slide 31: Australian Market Context – Residential completions expected to decline but remain at elevated levels
Australian Market Context – Residential completions expected to decline but remain at elevated levels in FY24 with multi- residential to pick up Residential¹ Multi - Residential² 140,000 120,000 120,000 Quantity Completed Annually Quantity Completed Annually 100,000 100,000 80,000 80,000 60,000 60,0
Slide 32: Australian Market Context – Commercial work done expected to remain steady, R&R declining
Australian Market Context – Commercial work done expected to remain steady, R&R declining from historically elevated levels Commercial¹ Repair and Renovation² 60,000 14,000 50,000 12,000 $m Approved Annually 10,000 $m Work Done 40,000 8,000 30,000 6,000 20,000 4,000 10,000 2,000 0 0 Actual Forecast
Slide 33: Australian Market Context – Residential completions expected to remain solid during H1 FY24
Australian Market Context – Residential completions expected to remain solid during H1 FY24, despite approvals declining from historical highs (Completions’ lag vs. approvals ~15 months) 160,000 140,000 Quantity Completed Annually 120,000 100,000 80,000 60,000 40,000 20,000 0 FY-2010 FY-2011 FY-2012
Slide 34: Thank You
THANK YOU GWA RESULTS PRESENTATION YEAR ENDED 30 JUNE 2023 > 14 AUGUST2023