Reece Limited · ASX:REH
Reece — Investor Presentation (February 2021)
43 slides from Reece's investor presentation, Feb 25, 2021
Slide 1: HY21 Results Presentation
ASX Announcement 25 February 2021 HY21 Results Presentation Proudly essential for 100 years Reece Limited (“Reece Group”; ASX:REH) announces record financial results for the half-year ending 31 December 2020. Attached is the HY21 Results Presentation. For further information contact: Michael Thorney
Slide 2: Half Year Results 2021
Half Year Results 2021 25 February 2021
Slide 3: Presenters
Reece Group – Half Year Results 2021 2 Presenters Peter Wilson Andrew Cowlishaw Group Chief Executive Officer Group Chief Financial Officer & Managing Director since 2008 20+ years' experience in finance 25+ years' experience at Reece, roles. Former Partner at EY including roles as General Manager o
Slide 4: Disclaimer
Reece Group – Half Year Results 2021 3 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 summ
Slide 5: Agenda
Reece Group – Half Year Results 2021 4 Agenda 01 02 03 04 Our focus Financial Business HY21 financial summary highlights performance
Slide 6: Agenda
Reece Group – Half Year Results 2021 5 Agenda 01 02 03 04 Financial Business HY21 financial summary highlights performance Our focus
Slide 7: Our purpose and values have guided us now more than ever
Reece Group – Half Year Results 2021 6 Our purpose and values have guided us now more than ever Improving the lives of our customers and people by striving for greatness every day. Customers Discover Grow as Innovate Try. Try. Try. for life. your best. a team. big and small. Own it. Keep it Do the B
Slide 8: 2020 - Celebrating our 100th year
Reece Group – Half Year Results 2021 7 2020 - Celebrating our 100th year “My favourite part of the job is the customer feedback and hearing the customer is happy.” David, Kimber Plumbing
Slide 9: Our long-term regional approach
Reece Group – Half Year Results 2021 8 Our long-term regional approach Australia & United New Zealand States Customised service in a Growth platform digital landscape
Slide 10: Protect and accelerate through COVID-19
Reece Group – Half Year Results 2021 9 Protect and accelerate through COVID-19 Protect and preserve Accelerate for the long-term Customised Resilience Adapting US growth service in a through to the new platform digital uncertainty COVID normal landscape
Slide 11: Protect and accelerate through COVID-19
Reece Group – Half Year Results 2021 10 Protect and accelerate through COVID-19 Protect and preserve Accelerate for the long-term Customised Resilience Adapting service in a US growth through to the new digital platform uncertainty COVID normal landscape
Slide 12: Protect and accelerate through COVID-19
Reece Group – Half Year Results 2021 11 Protect and accelerate through COVID-19 Protect and preserve Accelerate for the long-term Customised Resilience Adapting US growth service in a through to the new platform digital uncertainty COVID normal landscape
Slide 13: Our ESG approach
Reece Group – Half Year Results 2021 12 Our ESG approach FY21 Our customer led sustainability strategy Launching the Reece Foundation
Slide 14: Agenda
Reece Group – Half Year Results 2021 13 Agenda 01 02 03 04 Our focus Business HY21 financial Financial highlights performance summary
Slide 15: Financial highlights
Reece Group – Half Year Results 2021 14 Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 4% up 12% up 15% up 17% up 2%A to $3.1b to $349m to $236m to $123m to 19 cents Half year dividend Leverage ratio** (Net Debt / EBITDA*) 6 cents per share 1.9 x A: EPS has been diluted in HY
Slide 16: Segment performance
Reece Group – Half Year Results 2021 15 Segment performance ANZ 2,962 3,074 • Sales up 7% Sales Revenue (A$m) US • Sales up 1% on reported basis • Sales up 7% on constant 1,564 1,496 1,509 currency basis 1,465 Group • Sales up 4% • Unfavourable FX impact $97m ANZ US Total HY20 HY21 Refer to Appendix
Slide 17: Agenda
Reece Group – Half Year Results 2021 16 Agenda 01 02 03 04 Our focus Financial HY21 financial summary Business performance highlights
Slide 18: Business highlights: digitising the customer experience
Business highlights Digitising Foundations the customer for growth in experience the US in ANZ
Slide 19: Digitising the customer experience in ANZ
Business highlights Digitising the customer experience in ANZ
Slide 20: Digitising the customer experience
Reece Group – Half Year Results 2021 19 Digitising the customer experience Continue to invest in digitising the the customer experience Accelerate utilisation of maX and online Further embedding FieldPulse - integrating with key platforms Blending the face to face experience with digital in new stor
Slide 21: Bathroom Life
Reece Group – Half Year Results 2021 20 Bathroom Life
Slide 22: Expanding our market-leading products
Reece Group – Half Year Results 2021 21 Expanding our market-leading products Zurn Ryker Memo Kaden
Slide 23: ANZ branches
Reece Group – Half Year Results 2021 22 ANZ branches 11 123 52 640 44 182 179 34 15
Slide 24: Investing in the people experience
Reece Group – Half Year Results 2021 23 Investing in the people experience Culture Our people are engaged and feel supported across the Group Investing in our people LXP, our innovative approach to blended learning Top 10 Graduate Employer
Slide 25: Business highlights
Business highlights Digitising Foundations the customer for growth in experience the US in ANZ
Slide 26: Foundations for growth in the US
Business highlights Foundations for growth in the US
Slide 27: Investing in our people
Reece Group – Half Year Results 2021 26 Investing in our people Launched our people promise Focus on building long-term capability Strengthened commitment to learning
Slide 28: Understanding our customers
Reece Group – Half Year Results 2021 27 Understanding our customers Understanding the local market New store design trials Rebuilding eCommerce approach
Slide 29: US branches
Reece Group – Half Year Results 2021 28 US branches 189
Slide 30: Economic commentary
Economic commentary
Slide 31: ANZ economic commentary
Reece Group – Half Year Results 2021 30 ANZ economic commentary Dwelling Approvals Dwelling Completions (000s) (000s) 219 213 215 239 202 231 232 193 193 223 181 200 162 187 190 157 173 174 146 148 165 150 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Slide 32: US economic commentary
Reece Group – Half Year Results 2021 31 US economic commentary Single + multi-family housing starts Leading indicator of remodeling activity (000s) (US$bn / ROC%) 6.4% 6.7% 6.8% 6.5% 6.2% 6.3% 6.0% 6.1% 6.0% 6.3% Single -family housing starts 230 5.6% 390 250 4.5% 4.1% Multi-family housing starts 3.
Slide 33: Agenda
Reece Group – Half Year Results 2021 32 Agenda 01 02 03 04 Our focus Financial Business summary highlights HY21 financial performance
Slide 34: Financial highlights
Reece Group – Half Year Results 2021 33 Financial highlights Sales Normalised EBIT NPAT EPS Revenue EBITDA* up 4% up 12% up 15% up 17% up 2%** to $3,074m to $349m to $236m to $123m to 19 cents from $2,962m from $313m from $205m from $105m from 18.7cents Half year 6 cents per share, fully Normalised
Slide 35: ANZ segment performance
Reece Group – Half Year Results 2021 34 ANZ segment performance • Record increase in financial metrics Half Year 21 HY21 HY20 Var. (%) 31 December 2020 (A$m) • Sales revenue up 7% reflecting solid demand across all regions Sales revenue 1,564 1,465 7% • EBITDA margin expansion of 80 bps a function o
Slide 36: US segment performance
Reece Group – Half Year Results 2021 35 US segment performance • Sales up 7% on a constant currency Half Year 21 HY21 HY20 Var. (%) basis 31 December 2020 (A$m) • Unfavourable FX impact $97m Sales revenue 1,509 1,496 1% • Normalised EBITDA up 17% on constant currency basis Normalised EBITDA* 114 104
Slide 37: Cashflow
Reece Group – Half Year Results 2021 36 Cashflow Half Year 21 31 December 2020 (A$m) HY21 HY20 Net Working Capital Normalised EBITDA* 349 313 (A$m) Net movements in working capital (130) (24) Non-cash items in EBITDA 3 3 Income tax paid (85) (47) Finance costs (38) (44) Cash flow from operations 99
Slide 38: Balance sheet
Reece Group – Half Year Results 2021 37 Balance sheet Net debt including lease liabilities Net Debt* (A$m) HY21 FY20 (A$m) Cash and cash 954 1,005 equivalents 716 648 Senior debt 1,565 1,765 716 647 Lease liabilities 647 716 Net debt* 1,258 1,476 FY18 Net Financial asset/ (liability) (71) 14 FX deri
Slide 39: Summary
Summary
Slide 40: Summary
Reece Group – Half Year Results 2021 39 Summary Focus on what Record result we can control Resilient business Protect & model, providing an Accelerate essential service
Slide 41: Q&A
Reece Group – Half Year Results 2021 40 Q&A
Slide 42: Appendix A - FX bridge
Reece Group – Half Year Results 2021 41 Appendix A - FX bridge (A$m) (97)
Slide 43: Appendix B – AASB Leases reconciliation
Reece Group – Half Year Results 2021 42 Appendix B – AASB 16 Leases reconciliation • AASB 16 was appliable to the Group for the first time in FY20 • FY20 leverage ratio was previously disclosed excluding lease liabilities • Reconciliation below shows previously disclosed net leverage ratio and compa