Slide 1: ASX Announcement: Presentation at Jefferies Asia Forum
ASX Announcement For personal use only 15 September 2020 Presentation at Jefferies Asia Forum Reliance Worldwide Corporation Limited (ASX: RWC) advises that Heath Sharp, Group CEO, will be presenting at the Jefferies Asia Forum on 16 September 2020. A copy of the presentation is attached. For enquir
Slide 2: Jefferies Asia Forum
For personal use only Jefferies Asia Forum 16 September 2020 Heath Sharp Group CEO RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877
Slide 3: Important Notice
Important Notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (16 For personal use only September 2020). It is information given in summary form and does not purport to be complete. The presentation is not an off
Slide 4: Agenda
For personal use only Agenda 1. RWC Overview 04 2. FY20 Financial Performance 11 3. Covid-19 Response 19 4. Strategy and Outlook 22 3
Slide 5: RWC Overview
For personal use only RWC Overview 4
Slide 6: RWC at a glance
RWC at a glance RWC is a leader in the design, manufacture and supply of water flow and control For personal use only products and solutions for use in the “behind the wall” plumbing sector ▪ The leader in brass and plastic push to connect (“PTC”) fittings in key geographies ▪ Majority of sales are
Slide 7: RWC financial snapshot for year ended June 2020
RWC financial snapshot for year ended 30 June 2020 For personal use only Net sales Adjusted EBITDA 2 Adjusted NPAT 2 $1,162 million $251.3 million $130.3 million +5% growth overall1 -9% on prior year -18% on prior year Operating cash flow Net debt reduction Total dividend $278.3 million $124.4 milli
Slide 8: RWC product portfolio
RWC product portfolio RWC and its family of brands transform performance and efficiency for plumbing For personal use only and heating and specialist industries around the world. Fittings Pipe Valves Integrated FluidTech Installation Solutions
Slide 9: Fittings provide a strong foundation
Fittings provide a strong foundation A variety of fittings solutions that deliver efficiency and reliability available through a vast For personal use only network of outlets across markets and channels Available across Americas, UK, and Australia ▪ #1 position in Americas Brass PTC ▪ #1 position in
Slide 10: Growing category diversification
Growing category diversification RWC has built a complete portfolio of solutions with top market positions - all aligned with For personal use only the SharkBite value proposition – ease of use, efficiency, labor savings, and availability PEX pipe available across global regions ▪ Top 3 producer in
Slide 11: RWC operates in regions: Americas, Asia Pacific, EMEA
RWC operates in 3 regions: Americas, Asia Pacific, EMEA For personal use only 10
Slide 12: FY20 Financial Performance
For personal use only FY20 Financial Performance 11
Slide 13: Summary of FY20 Performance
Summary of FY20 Performance For personal use only A$m FY19 FY20 % ▪ Net sales up 5% driven by strong 2nd half Americas Change sales growth partly offset by lower sales in EMEA due to Covid-19 Net Sales 1,104.0 1,162.4 5% ▪ A$/US$ weakness during the 2nd half positively Reported EBITDA 242.5 217.9 -1
Slide 14: Strong operating cash flow performance
Strong operating cash flow performance Cash generated has enabled reduction in net debt and payment of final dividend For personal use only Cash Flow from $m Operations Net Debt/EBITDA Total Dividends Declared ($m) 278.3 2.0 80 71.1 1.9 70 250 1.8 60 55.3 200 1.7 1.67 178.9 1.57 50 1.6 42.1 150 1.5
Slide 15: Segment results: Americas
Segment results: Americas Resilience of the US market and repair and remodel sector demonstrated For personal use only US$m FY19 FY20 % US$m 1H20 % over pcp 2H20 % over pcp Net Sales 467.8 495.8 6% Net Sales 237.4 1% 258.4 11% EBITDA 79.1 64.9 -18% EBITDA 36.7 -8% 28.2 -16% Adjustments 2.0 14.4 n/m
Slide 16: Americas: 11% second half revenue growth
Americas: 11% second half revenue growth Covid-19 impact estimated to be 3.4% of Americas second half sales growth For personal use only Figures are in US$ Market growth – source: LIRA 15
Slide 17: Segment results: Asia Pacific
Segment results: Asia Pacific Sales performance reflects success of new products introduced in Australian market For personal use only A$m FY19 FY20 % Change A$m 1H20 % over pcp 2H20 % over pcp Net Sales 249.1 244.8 -2% Net Sales 125.4 -3% 119.4 0.1% EBITDA 48.1 44.3 -8% EBITDA 22.8 -7% 21.4 -9% Adj
Slide 18: Segment results: EMEA
Segment results: EMEA Significant impact from Covid-19 restrictions and curtailed distribution For personal use only GBPm FY19 FY20 % GBPm 1H20 % over pcp 2H20 % over pcp Net Sales 199.5 172.7 -13% Net Sales 94.4 -2% 78.3 -24% EBITDA 54.0 43.2 -20% EBITDA 28.4 17% 14.8 -48% Adjustments 7.5 6.3 n/m A
Slide 19: John Guest Look-back
John Guest Look-back Business quality and successful integration with RWC demonstrated despite Covid-19 For personal use only ▪ Integration successfully completed with improved operational performance ▪ John Guest and RWC cultures successfully meshed together John Guest Synergy Realisation (A$m) ▪ S
Slide 20: Covid-19 Response
For personal use only Covid-19 Response 19
Slide 21: Responding to the Covid-19 Pandemic
Responding to the Covid-19 Pandemic Employee health and safety ▪ Health and safety of RWC employees has been our number one priority For personal use only ▪ On-site social distancing, daily temperature checks, provision of additional PPE ▪ Cleaning protocols initiated to deal with any outbreak at al
Slide 22: Responding to the Covid-19 Pandemic (cont'd)
Responding to the Covid-19 Pandemic (cont’d) For personal use only Preserving cash ▪ Review of SG&A: limited discretionary expenditure ▪ Capex: all non-essential capex halted, capex reduced by approx. $17m for FY20 ▪ Working capital management: a key area of focus, particularly inventory levels and
Slide 23: Strategy and Outlook
For personal use only Strategy and Outlook 22
Slide 24: Strategy Overview
For personal use only Strategy Overview 23
Slide 25: Strategy overview
Strategy overview Our strategy is unchanged but we have sharpened our new product For personal use only development approach with increased focus on core products ▪ Guiding strategy is unchanged, after extensive review in light of Covid-19 ▪ The greater focus on core products we announced at the hal
Slide 26: Outlook for FY 2021
Outlook for FY 2021 RWC is not providing earnings guidance at this time For personal use only ▪ Due to the uncertain market outlook and potential impacts of further Covid-19 outbreaks, RWC will not provide earnings guidance for FY20211 ▪ We will ensure the market has appropriate visibility on tradin
Slide 27: Segment performance drivers: Americas
Segment performance drivers: Americas US home improvement has seen strong growth during Covid-19 For personal use only Market backdrop: ▪ Low-interest rate environment remains supportive ▪ US demographics support a strong rate of household formation ▪ Unemployment rate and a broader recession will b
Slide 28: Segment performance drivers: Asia Pacific
Segment performance drivers: Asia Pacific Declining Australian new residential construction likely to negatively impact volumes For personal use only Australian Residential Approvals1 Market backdrop: 250,000 -26% ▪ We expect to be adversely impacted by a reduction in 200,000 Australian new resident
Slide 29: Segment performance drivers: EMEA
Segment performance drivers : EMEA Covid-19 led to a severe economic contraction in EMEA; outlook remains uncertain For personal use only Market backdrop: UK new work, repair and maintenance1 120 ▪ The European economy is experiencing a severe contraction resulting in CY20 annual GDP declines of 8-
Slide 30: Priorities for FY21
Priorities for FY21 We will continue investing in the future growth of the business while meeting the For personal use only operational challenges and market uncertainties of the current environment ▪ Health & safety and wellbeing of our people, especially in the context of ongoing COVID, including
Slide 31: Summary
Summary We remain well positioned for future growth and the resilience of the business For personal use only has been demonstrated through the Covid-19 pandemic ▪ The RWC business is robust, successfully weathering recent extreme challenges ▪ The plumbing & heating market, and especially our primary
Slide 32: Supplementary Information
For personal use only Supplementary Information
Slide 33: FY20 Group EBITDA margin drivers
FY20 Group EBITDA margin drivers Results significantly impacted by Covid-19 ▪ Volume / Mix: sales performance varies by region For personal use only reflecting the differing market responses to the pandemic • EMEA: Sales in our highest margin business impacted by Covid-19 in the second half • Americ
Slide 34: Restructuring and non-cash impairment charges
Restructuring and non-cash impairment charges Continuous improvement and cost out initiatives expected to yield A$25m benefit on an For personal use only annualised basis by end of FY21 Summary of restructuring and impairment EBITDA charges (A$m) Impact ▪ Restructuring costs of $10.7m incurred in FY
Slide 35: Cash flow performance
Cash flow performance Strong cash flows in the second half and for the year ended 30 June 2020 For personal use only A$m FY19 FY20 % 2HY19 2HY20 % Reported EBITDA $242.5 $217.9 -11% $121.8 $92.0 -25% Changes in working capital -$63.6 $60.4 n/m -$12.4 $51.1 n/m Cash flow from operations $178.9 $278.3
Slide 36: Cash flow generation from operations
Cash flow generation from operations A$m FY19 FY20 Variance For personal use only Reported EBITDA 242.5 217.9 -10.0% Changes in Working Capital (63.6) 60.4 Cash flow from operations1 178.9 278.3 53.9% Operating cash flow conversion2 73.8% 127.7% Growth capital expenditure (45.2) (21.5) -52.4% Mainte
Slide 37: Capital expenditure
Capital expenditure FY2021 forecast capital expenditure (A$m) For personal use only 90 6.3% 5.6% 6.0% 80 5.0% $70m 70 5.0% 4.2% 3.7% 60 4.0% 50 $35m-$55m Maintenance $38m $43m 40 $30m 3.0% 30 $26m Growth 2.0% 20 1.0% % of Sales 10 0 0.0% FY16 FY17 FY18 FY19 FY20 FY21 Cullman Phase 1 Property acquisi
Slide 38: Balance Sheet further strengthened
Balance Sheet further strengthened For personal use only Debt metrics Commentary (A$m) 30 June 2019 30 June 2020 ▪ Strong balance sheet with net leverage of 1.39x at 30 June ▪ Net debt reduced by $124.4m since 30 June 2019 Cash and cash equivalents 69.3 82.2 ▪ Syndicated bank debt facility of $750m
Slide 39: Reported segment results (A$)
Reported segment results (A$) For personal use only AMERICAS (A$m) FY19 FY20 % Net Sales 653.9 739.1 13% EBITDA 102.5 96.8 -6% EBITDA margin 15.7% 13.1% (260) bps Adjustments 10.1 21.4 Adjusted EBITDA 112.6 118.2 5% Adjusted EBITDA margin 17.2% 16.0% (120) bps EMEA (A$m) FY19 FY20 % Net Sales 360.9
Slide 40: Summary of restructuring and impairment charges
Summary of restructuring and impairment charges For personal use only A$m FY19 FY20 John Guest Costs to Achieve Synergies $19.7 - Implementation of AASB 16 (Lease Accounting) $16.3 - Impairment of US non-core products - $16.8 EMEA Restructuring - $6.0 Impairment of Spain operations - $5.9 US Restruc