Gwa Group Limited · ASX:GWA
Gwa — H1 FY2023 Earnings Presentation
36 slides from Gwa's earnings presentation, Feb 20, 2023
Slide 1: ASX Release – Financial Results Presentation
20 February 2023 ASX Release GWA Group Limited (GWA Group) – Financial Results Presentation for the Half Year ended 31 December 2022 GWA Group encloses the following document for immediate release to the market: “Results Presentation – Half Year ended 31 December 2022”. On 20 February 2023 at 11.00
Slide 2: Results Presentation – Half Year ended December 2022
Results Presentation Half Year ended 31 December 2022 20 February 2023 1
Slide 3: Presenters
Presenters Urs Meyerhans Calin Scott Craig Norwell Managing Director and CEO Group Chief Financial Officer Group Executive - Sales 2
Slide 4: Agenda
Agenda ‒ Overview and Safety ‒ Group Financial Results ‒ Business Performance ‒ New Products ‒ Strategic Update ‒ Summary & FY23 Outlook ‒ Q&A ‒ Appendix 3
Slide 5: Overview
01) Overview |G GWA Souptinie | METHVEN dorf
Slide 6: Revenue growth of 3% despite mixed performance of end markets
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Revenue growth of 3% despite mixed performance of end markets 1H FY23 Revenue up 2.9%, Reported EBIT up 13%, Normalised EBIT down 4.2%; ‒ Mixed market performance, residential renovation saw a reven
Slide 7: Evolving safety focus & maturity
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Evolving safety focus & maturity • Shift to leading indicators (worker insight frequency rate) Worker Insights • Updating risk profile to include Psychosocial Risk 1300 • Responding to changing ways o
Slide 8: Group Financial results
02 | Group Financial results 1G GWA Souptinie | METHVEN dorf
Slide 9: Revenue up 3% despite mixed market performance
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Revenue up 3% despite mixed market performance A$m Reported 1H FY23 1H FY22 % Change Revenue 207.1 201.3 2.9% ‒ Improved Group Revenue driven by: EBITDA 43.4 40.5 7.2% EBIT 34.1 30.2 12.9% ‒ Australia
Slide 10: Proactive price increases to offset external cost increases
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Proactive price increases to offset external cost increases ‒ Volume/Mix: reflects negative impact of Q2 on Normalised¹ EBIT Bridge (A$M) volumes, partially offset by favourable sales mix in 50 Austra
Slide 11: Improved cash flow from operations and free cash flow
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Improved cash flow from operations and free cash flow Cash flow from Continuing Operations A$M 1H FY23 1H FY22 Cash conversion* improved to 103% EBITDA 43.4 45.5 Net movement in Working Capital 2.2
Slide 12: Stock on Hand – quantity vs value
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Stock on Hand – quantity vs value Stock on Hand1 – Qty vs Value Proactive inventory management in response Value $’m Quantity 000s to Covid challenges in South-East Asia 120 3,000 resulting in curre
Slide 13: FY23 interim dividend of 6.0c per share
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook FY23 interim dividend of 6.0c per share Dividends – Cents/share 9.5 8.0 3.5 6.5 - 9.0 8.0 7.0 6.0 6.0 FY19 FY20 FY21 FY22 FY23 Final ordinary Interim ordinary 12
Slide 14: Solid financial position maintained
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Solid financial position maintained 30 June 30 June 30 June 30 June 31 Dec ‒ Net debt $136.6m, down 1% from June 2022 Metrics1 2019 2020 2021 2022 2022 Net Debt 141.9 144.8 104.8 138.2 136.6 ‒ Credit
Slide 15: Business Performance
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Slide 16: Group revenue improved by +3% vs 1H FY22
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Group revenue improved by +3% vs 1H FY22 1H FY23 Revenue Revenue commentary $ Revenue & % of Group AUD Q1FY23 Q2FY23 Australia AUD $m $m 85.4 82.0 ‒ Strong Q1 growth offset by decline in Q2 $167.4m 81
Slide 17: Revenue by State
Financial Business New Strategic Summary & Overview Revenue by State results performance Products focus FY23 Outlook A$m Revenue 1H FY23 1H FY22 % Change NSW NSW 58.5 59.4 -1.4% • Strong R&R led Q1 +12%, with Q2 impacted by commercial VIC 42.9 39.3 9.2% QLD 33.3 30.9 7.5% projects delayed to 2H and
Slide 18: Top customers: Australia – 3 in Growth
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Top 4 customers: Australia – 3 in Growth Customer A vs PcP Customer B vs PcP Q1FY23 Q2FY23 1HFY23 Q1FY23 Q2FY23 1HFY23 3 out of 4 Merchant partners in growth driven by 13.2% 10.9% 8.4% Continued sol
Slide 19: Supply chain risks
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Supply chain risks Challenges Mitigation strategies Healthy inventory levels to minimise the impact of Impacts of COVID (particularly in China) manufacturing disruptions Long term contracts in pla
Slide 20: New Products
04 | New Products 0G GWA | MeTHVEN | Clann | dorf Group Limited
Slide 21: Promising NPD launches
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Promising NPD launches ‒ Launch of consumer smart bathroom and kitchen collections including smart toilets, sensor sink & bathroom mixers and soap dispensers to capture growing demand for touchless pr
Slide 22: Strategy Update
05 | Strategy Update auilG GWA Souptinie | METHVEN dorf
Slide 23: Strategy on a page
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Strategy on a page Making everyday water experiences extraordinary – today, and for tomorrow STRATEGY To be the trusted and integrated solutions partner in the delivery of sustainable water solutions
Slide 24: Key Strategic Highlights
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Key Strategic Highlights • 11,000 plumbers engaged – defined specific profiles Win The Plumber • Successful trial of dedicated technical phone line – 90% success • Consumer smart products Innovate thr
Slide 25: Summary and FY23 outlook
06 Summary and FY23 outlook 24
Slide 26: Revenue growth of 3% despite mixed performance of end markets
Financial Business New Strategic Summary & Overview results performance Products focus FY23 Outlook Revenue growth of 3% despite mixed performance of end markets 1H FY23 Revenue up 2.9%, Reported EBIT up 13%, Normalised EBIT down 4.2%; Balance sheet remains solid 6.0 cents per share fully franke
Slide 27: FY23 outlook
Financial Business New Strategic Summary & FY23 outlook¹ Overview results performance Products focus FY23 Outlook Key focus FY23 commentary Mixed sentiment across key construction segments Commercial – continued demand for new build and R&R Key Markets Residential detached – momentum expected
Slide 28: Q&A
07/Q&A 27IG Sp unites | METHVEN | dorf
Slide 29: Disclaimer
Disclaimer 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 subjective
Slide 30: Appendix
08 | Appendix 2flG Sr nis | METHVEN | | dorf
Slide 31: FY23 Key Assumptions
FY23 Key Assumptions1 Area FY23 Expectation Actual 1H Australian market BIS total building activity data2 is indicating a market decline of 4% in FY23 (July 2022 +3%) backdrop Price increase 5% implemented in ANZ from 1 July 2022. 5% implemented in ANZ from 1 July 2022 and UK from 1 ~4% implemented
Slide 32: Continuing strength in sanitaryware
Continuing strength in sanitaryware Segment Category Project Valves Basins, Sinks, 2% 22% Tubs & Baths 18% Sanitaryware Builder 44% 10% Sub-Segment1 Merchant 68% Commercial 21% Taps & Showers 36% Geography Muli-Res 4% Brand International R&R Other 8% Resi 60% 16% 15% New Zealand 11% Dorf 2% Methven
Slide 33: Australian Market Context – residential completions expected to remain at elevated levels
Australian Market Context – residential completions expected to remain at elevated levels in 2H with multi-residential to pick up Residential¹ Multi - Residential² 120,000 140,000 Quantity Completed Annually Quantity Completed Annually 120,000 100,000 100,000 80,000 80,000 60,000 60,000 40,000 40,00
Slide 34: Australian Market Context – Commercial work done 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 12,000 50,000 10,000 $m Approved Annually 8,000 $m Work Done 40,000 6,000 30,000 4,000 20,000 2,000 10,000 0 0 Actual Forecast Actual
Slide 35: Residential completions expected to remain strong during FY23
Residential completions expected to remain strong during FY23, despite approvals declining from historical highs (Completions’ lag vs. approvals ~15 months) 160,000 140,000 120,000 Quantity Completed Annually 100,000 12 mths 12 mths 15 mths 80,000 60,000 40,000 20,000 0 FY-2010 FY-2011 FY-2012 FY-20
Slide 36: Results Presentation
Results Presentation Half Year ended 31 December 2022 20 February 2023 35