Reece Limited · ASX:REH
Reece — Investor Presentation (February 2023)
32 slides from Reece's investor presentation, Feb 22, 2023
Slide 1: HY23 Investor Presentation (ASX Announcement)
ASX Announcement 22 February 2023 HY23 Investor Presentation Attached for release is Reece Limited’s results presentation for the 6 month period ended 31 December 2022. For further information contact: Siobhan Weaver Investor Relations E: siobhan.weaver@reece.com.au T: 0477 480 813 This announcement
Slide 2: Half Year Results 2023
Half Year Results 2023 6 months ended 31 December 2022 1. HY23 Result
Slide 3: 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 summary form and does not purport to be com
Slide 4: Presenters
Presenters Peter Wilson Andrew Cowlishaw Group Chief Group Chief Executive Officer Financial Officer 3. HY23 Result
Slide 5: What we'll share today
What we’ll share today 01 02 03 HY22 summary HY23 Strategy recap Operational overview overview 04 05 06 HY23 Financial Outlook & Summary Performance summary 4. HY23 Result
Slide 6: Financial overview
Financial overview Strong first half driven by inflation in softening volume environment Sales Normalised EBIT NPAT EPS Revenue EBITDA1 up 23% up 25% up 18% up 18% up 18% to $4.4b to $495m to $325m to $186m to 28.8 cents ANZ US Net leverage ratio2 HY23 dividend Sales Revenue up Sales Revenue up 1.2x
Slide 7: Strategy recap
01 Strategy recap 6. HY23 Result
Slide 8: Our Blueprint
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 Operational Customised To improve the lives service of our customers values guide our trade's most Excellence and our people by decisi
Slide 9: Strategy positions Reece for long term success
Strategy positions Reece for long term success Diversified business A trusted brand Clear track record 1 with a differentiated customer proposition 2 100 years of growth through the cycle 3 by geography, segment, customer; focused on resilient R+R Large markets Long term focus 4 5 6 Well capitalised
Slide 10: ANZ Operational Overview
Operational Overview ANZ 9. HY23 Result
Slide 11: Ongoing resilience in complex environment
Ongoing resilience in complex environment Operational Accelerating Investing for Excellence Innovation Profitable Growth • Ongoing focus on being • Progressing innovation • Network upgrades; ANZ brilliant at the fundamentals initiatives; focus on trade store refurbishment of the future program • Con
Slide 12: ANZ network of scale
Investing for Profitable Growth 650 11 ANZ network Branches of scale 123 51 181 45 185 39 Network density enables 15 delivery of our customer promise 11. HY23 Result
Slide 13: Customer at the core
Operational Excellence Customer at the core World-class NPS of 60 Feedback continues to reinforce importance of our customer focused approach 12. HY23 Result
Slide 14: Strong in-stock position for customers
Operational Excellence Strong in-stock position for customers 98.5%
Slide 15: US Operational Overview
Operational Overview US 14. HY23 Result
Slide 16: Continued execution of long-term strategy
Continued execution of long-term strategy Operational Accelerating Investing for Excellence Innovation Profitable Growth US • Embedding culture, building • Investing in digitising • Progressed network out training and customer experience investment program development program (refurb, new stores, re
Slide 17: Building our US footprint
Investing for 212 Profitable Growth Building our Branches US footprint Brand rollout commenced West coast Refurb and new branch program progressing across geographies 16. HY23 Result
Slide 18: Reece brand roll out commenced
Investing for Profitable Growth Reece brand roll out commenced Local Reece presence a symbolic milestone California branches now trading as Reece 17. HY23 Result
Slide 19: HY23 Financial performance
02 HY23 Financial performance 18. HY23 Result
Slide 20: Financial highlights
Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA1 up 23% up 25% up 18% up 18% up 18% to $4.4b to $495m to $325m to $186m to 28.8 cents from $3.6b from $397m from $275m from $157m Half 8 cents per share, Normalised up 14bps Net 1.2x year fully franked EBITDA1 margin 11.2% leverage d
Slide 21: ANZ performance
ANZ performance HY23 • Sales up 11% driven by 11% estimated 1HY23 1HY22 Var. % 2HY22 31 December 2022 (AU$m) product inflation in HY23 • Volumes softened progressively over HY23, contracting ~2% in Q2 vs. pcp Sales revenue 1,928 1,733 11% 1,785 • Normalised EBITDA1 up 18% Normalised EBITDA1 293 24
Slide 22: US performance
US USD performance HY23 31 December 2022 (US$m) 1HY23 1HY22 Var. % 2HY22 Sales revenue 1,678 1,364 23% 1,622 • Sales up 23% on USD basis driven by 22% estimated product inflation Normalised EBITDA1 136 108 26% 118 in HY23 EBIT 85 65 31% 66 • Volumes softened progressively over HY23, contracting ~6%
Slide 23: Cashflow
Cashflow HY23 31 December 2022 (A$m) HY23 HY22 Normalised EBITDA1 495 397 • Improved operating cash flows Net movements in working capital (incl. FX) (186) (348) • Strategic investment in inventory Non-cash items in normalised EBITDA1 8 7 Income tax paid (90) (88) • Invest through the cycle Finance
Slide 24: Disciplined approach to capital management
Disciplined approach HY23 HY23 FY22 31 December 2022 (A$m) to capital management Cash 142 220 Trade and other receivables 1,293 1,368 Inventories 1,575 1,528 • Investment in organic growth Other current assets - 7 • Strategic M&A Total current assets 3,010 3,123 PPE and leases 1,496 1,493 • Balance
Slide 25: Outlook and summary
05 Outlook and summary 24. HY23 Result
Slide 26: Expect ongoing macro softening in FY23
25 Expect ongoing macro softening in FY23 Anticipate volumes to contract further in 2H23 Disciplined approach to costs while continuing to invest in the business Long-term fundamentals supporting our markets remain attractive Resilient business model and long term approach to deliver 2030 vision 25.
Slide 27: Summary
Summary Strong Long-term Investing for Result Focus the Future 26. HY23 Result
Slide 28: Reece Group
reece group"
Slide 29: Appendix & supplementary information
Appendix & supplementary information 28. HY23 Result
Slide 30: Adjusted metrics
Reece Group – Half Year Results 2023 Adjusted metrics Reconciliation from Statutory EBIT to Adjusted EBIT Reconciliation from Statutory NPAT to Adjusted NPAT HY23 HY23 HY23 HY22 Var. % HY23 HY22 Var. % 31 December 2022 (A$m) 31 December 2022 (A$m) EBIT (statutory) 325 275 NPAT (statutory) 186 157 Ad
Slide 31: Group definitions
Reece Group – Half Year Results 2023 Group definitions EBITDA adjusted to exclude impairment, business acquisition costs and refinance costs (as reported in note 2 of 1 Normalised EBITDA the Interim Financial Report) 2 Net leverage ratio Net borrowings over 12-month rolling EBITDA, calculated on a p
Slide 32: FX impact on sales
FX impact on sales 31. HY23 Result