Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — FY2016 Earnings Presentation
31 slides from Reliance Worldwide's earnings presentation, Aug 29, 2016
Slide 1: FY2016 Results Presentation
RELIANCE WORLDWIDE CORPORATION LIMITED ACN 610855877 www.rwc.com FY2016 RESULTS PRESENTATION 29 August 2016
Slide 2: Important notice
Important notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (29 August 2016). It is information given in summary form and does not purport to be complete. The presentation is not an offer or invitation for subs
Slide 3: Agenda
Agenda 1. Highlights 4 2. Introduction to Reliance 15 3. Financial performance 24 4. Growth and outlook 29 5. Appendix 31 Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 2
Slide 4: 1. Highlights
1. Highlights Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 3
Slide 5: FY2016 achievements
FY2016 achievements Continued market penetration of SharkBite PTC fittings and accessories in the Americas Phase 1 of USA factory expansion completed, production of SharkBite PTC fittings commenced EvoPEX approval testing and trials completed Spain PEX facility commenced production, first sa
Slide 6: FY2016 financial highlights (12 months)
FY2016 financial highlights (12 months) Pro forma net sales Pro forma EBITDA1 Pro forma NPAT1 $534.4 million $99.1 million $52.1m million +18% growth vs PF FY2015 +25% growth vs PF FY2015 +2% above Prospectus forecast Strong net sales Ongoing cost focus Strong balance sheet growth from A
Slide 7: Continuing Reliance's long-term track record of strong growth
Continuing Reliance’s long-term track record of strong growth RWC historical net sales growth, constant currency basis1 (A$m) 534 497 458 358 373 379 319 257 272 206 160 FY06A FY07A FY08A FY09A FY10A FY11A FY12A FY13A FY14A FY15A FY16A Note 1: Period from FY2006 to FY2016. Pro forma net sales calcul
Slide 8: 2. Introduction to Reliance
2. Introduction to Reliance Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 7
Slide 9: RWC is a leader in water flow and control products for behind the wall plumbing
RWC is a leader in the design, manufacture and supply of water flow and control products and solutions for use in the “behind the wall” plumbing industry Leader in high growth brass push-to-connect (“PTC”) fittings category in key geographies Majority of sales to the defensive repair and renovat
Slide 10: Market leader in North America and Australia across key product lines
Market leader in North America and Australia across key product lines Product line Key brands Brass PTC fittings1 #1 #1 Recently launched #1 Fittings and pipe RWC category RWC category share: 80%2 share: 85%2 PEX pipe1 Top 5 #2 Recently launched Recently launched Temperature & pressure (“T&P”) relie
Slide 11: Global manufacturing and distribution footprint
Global manufacturing and distribution footprint, with infrastructure in place to support strong future growth Evesham, UK Distribution 2 Vaughan, Ontario Distribution 1 Brisbane, QLD Manufacturing 1 Distribution 1 R&D 1 Granada, Spain Perth, WA Cullman, Alabama Manufacturing 1 Distribution 1 Manufac
Slide 12: 3. Financial performance
3. Financial performance Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 11
Slide 13: FY2016 pro forma results (12 months)
FY2016 pro forma results (12 months) Commentary Prospectus forecast FY2016 results ahead of prospectus forecast Pro forma Pro forma Variance pro forma Variance June year end (A$m) FY2016 FY2015 (%) FY2016 (%) Achieved an 18% increase in net sales vs PF FY2015 Net sales 534.4 451.7 + 18% 534.9 –
Slide 14: Group EBITDA bridge (FY2015 – FY2016)
Group EBITDA bridge (FY2015 – FY2016) A$m Strong growth driven by continued Improvement in gross margin and lower market penetration of SharkBite and opex (as % of sales) driven by cost lower AUD/USD exchange rate reductions and operational efficiencies 7.6 0.7 47.3 11.1 64.7 15.7 99.1 79.4 FY2015 p
Slide 15: Segment results – Americas
Segment results – Americas Pro forma Pro forma Prospectus forecast June year end (A$m) FY2016 FY2015 Variance (%) pro forma FY2016 Variance (%) Net sales1 365.0 300.3 + 22% 364.0 – EBITDA 58.4 47.4 + 23% 57.1 + 2% EBITDA margin 16.0% 15.8% + 20 bps 15.7% + 30 bps Financial commentary Operational com
Slide 16: Segment results – Asia Pacific
Segment results – Asia Pacific Pro forma Pro forma Prospectus forecast June year end (A$m) FY2016 FY2015 Variance (%) pro forma FY2016 Variance (%) Net sales1 201.0 189.9 + 6% 200.4 – EBITDA 39.3 33.4 + 18% 39.0 + 1% EBITDA margin 19.6% 17.6% + 200 bps 19.5% + 10 bps Financial commentary Operational
Slide 17: Segment results – EMEA
Segment results – EMEA Pro forma Pro forma Prospectus forecast June year end (A$m) FY2016 FY2015 Variance (%) pro forma FY2016 Variance (%) Net sales1 51.1 43.5 + 17% 53.7 - 5% EBITDA 3.8 1.0 + 280% 4.1 - 7% EBITDA margin 7.4% 2.3% + 510 bps 7.6% - 20 bps Financial commentary Operational commentary
Slide 18: Strong free cash flow conversion (12 months)
Strong free cash flow conversion (12 months) Prospectus Commentary Pro forma Pro forma forecast June year end (A$m) FY16 FY15 Variance (%) pro forma FY16 Variance (%) Stronger net cash flows compared with EBITDA 99.1 79.4 + 25% 97.8 + 1% PF FY2015 and prospectus forecast Non-cash items in Positi
Slide 19: Capital expenditure
Capital expenditure Historical capex (A$m) and capex as % of depreciation Upgrade of manufacturing capabilities Bolt-on acquisition of plastic Commenced construction of Cullman Phase 1 expansion in Australia and USA components manufacturer TMA Cullman facility completed, increasing brass PTC fitting
Slide 20: Balance sheet strength
Balance sheet strength Capitalisation Commentary Prospectus pro forma Strong balance sheet position A$m As at 30 June 2016 (at completion of Offer) Significant liquidity available to fund growth Cash and cash equivalents 35.6 10.0 Lower net debt vs prospectus forecast due to: Total debt 163.5
Slide 21: 4. Strategy and outlook
4. Strategy and outlook Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 20
Slide 22: Overview of growth strategy
Overview of growth strategy 6 1 Continued penetration of Industry consolidation brass PTC fittings and accessories in USA 5 2 Growth in market for New product development thermostatic and other Growth products Strategy 4 3 Expansion into new Expansion into new geographic markets end-markets Reliance
Slide 23: Increased penetration of PTC fittings and accessories in the USA
Increased penetration of PTC fittings and accessories in the USA PTC is the fastest growing category in US residential plumbing US residential plumbing fittings market by fitting type2 fittings Press PTC 2% Current penetration remains low at ~10% 10% PTC sales projected to grow at CAGR of appr
Slide 24: Expanding our USA retail distribution network
Expanding our USA retail distribution network Overview of Lowe’s agreement Agreement covers Reliance’s SharkBite range of PTC fittings and accessories and related products, including PEX pipe, crimp fittings and clamps Sole Supplier arrangement – i.e. SharkBite range of PTC and related products
Slide 25: Investing in growth in the USA – Cullman, Alabama expansion
Investing in growth in the USA – Cullman, Alabama expansion Overview Highly automated manufacturing and distribution centre located in Cullman, Alabama Manufactures control valves and PEX pipe Recent major investment program to support SharkBite growth in the USA Phase 1 (2 production cells)
Slide 26: Expansion into new end-markets through new product development
Expansion into new end-markets through new product development Leveraging PTC technology to enter the USA residential new construction and commercial markets EvoPEX approval testing and trials completed SharkBite 2XL currently in the testing and commercialisation phase Preliminary market fee
Slide 27: FY2017 outlook
FY2017 outlook Reliance confirms its pro forma FY2017 Prospectus profit forecast1 Reliance confirms it is expected to consider an interim dividend in respect of the 6 months to 31 December 2016 and a final dividend in respect of the 6 months to 30 June 2017 in line with target dividend payout ra
Slide 28: 5. Appendix
5. Appendix Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 27
Slide 29: FY2016 statutory results
FY2016 statutory results Actual Prospectus Commentary statutory statutory June year end (A$m) FY2016 FY2016 Variance (%) Actual FY2016 statutory results exceeded prospectus forecast due Net sales 98.3 89.0 + 10% to: Timing of the restructure becoming effective; and EBITDA1 17.3 15.2 + 14% Lowe
Slide 30: Statutory to pro forma results reconciliation
Statutory to pro forma results reconciliation Statutory NPAT to pro forma NPAT Commentary June year end (A$m) Actual FY2016 Prospectus FY2016 Variance (%) Trading for the period in line with prospectus forecasts Statutory NPAT (1.6) (5.4) nmf Statutory NPAT higher than prospectus forecast due la
Slide 31: Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 30
Reliance Worldwide Corporation Limited INVESTOR PRESENTATION FY2016 RESULTS | PAGE 30