Gwa Group Limited · ASX:GWA
Gwa — FY2022 Earnings Presentation
37 slides from Gwa's earnings presentation, Aug 15, 2022
Slide 1: GWA Group Limited – FY2022 Full Year Results Presentation (ASX cover letter)
15 August 2022 The Manager Company Announcements Office Australian Securities Exchange Dear Sir or Madam GWA Group Limited (GWA Group) – FY2022 Full Year Results Presentation Please find attached for immediate release to the market the FY2022 Full Year Results Presentation for GWA Group. On 15 Augus
Slide 2: Results Presentation – Year ended June 2022
Results Presentation Year ended 30 June 2022 15 August 2022 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 • Group Financial Results • Business Performance • Strategic Update • Summary & FY23 Outlook • Q&A • Appendix 3
Slide 5: 01 Overview
01) Overview IG GWA : Group Limited | METHVEN CLARK dorf
Slide 6: Pleasing result in light of challenging economic conditions
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Pleasing result in light of challenging economic conditions • Improved financial performance FY22 vs FY21 ‒ Revenue up 3.2%; Normalised EBIT up 9.3%; EBIT margin up 100 bps • Balance sheet remains solid ‒ 8.0 cent
Slide 7: Improved safety performance
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Improved safety performance Total Injury Frequency Rate • Reduction in in Total Injury Frequency Rate from 4.3 to 14.0 13.0 1.9 in FY22 12.0 ‒ Continued risk management 10.0 10.0 ‒ Improved reporting 8.0 • Proacti
Slide 8: 02 Group Financial Results
02 | Group Financial Results 1G GWA Group Limited
Slide 9: Normalised EBIT up 9.3% with solid uplift in EBIT margin
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Normalised EBIT up 9.3% with solid uplift in EBIT margin • Improved Group Revenue driven by: ‒ Australian performance – up 7% PcP, offset by ‒ Decline in New Zealand (Covid related impact) – down 17% PcP ‒ Interna
Slide 10: Price rises enable effective mitigation of supply chain disruptions
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Price rises enable effective mitigation of supply chain disruptions • Volume/Mix: reflects negative impact of COVID-19 on volumes, particularly in international markets partially offset by favourable sales mix in
Slide 11: Group – improvement on a normalised basis in 2H FY22
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Group – improvement on a normalised basis in 2H FY22 A$m Normalised¹ 1H FY22 2H FY22 % Change FY22 Revenue 201.3 217.4 8.0% 418.7 EBITDA 45.5 49.1 7.8% 94.6 EBIT 35.6 39.2 10.2% 74.8 NPAT 22.4 24.9 11.5% 47.3 • Im
Slide 12: FY22 full year dividend increased by 20% from FY21
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook FY22 full year dividend increased by 20% from FY21 • Final dividend of 8.0 cents per share fully franked represents an increase of 23% vs FY21 9.5 • This brings the FY22 full year dividend to 15.0 8.0 cents per sh
Slide 13: Free cash flow impacted by working capital and significant items
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Free cash flow impacted by working capital and significant items • Reduction in Cash Flow from Operations due to: ‒ Planned inventory build ‒ Short term ERP impact on trade receivables • Lower capital expenditure
Slide 14: Free cash flow impacts
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Free cash flow impacts • Inventory increase due to: ‒ Planned inventory build in response to supply chain challenges ‒ Lower inventory on hand in FY21 due to shipping delays ‒ Increased freight costs ‒ Extended le
Slide 15: Solid financial position maintained
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Solid financial position maintained 30 June 30 June 30 June 30 June 30 June • Net debt $138.2m up 32% on prior year due Metrics1 2018 2019 2020 2021 2022 to increase in working capital Net Debt 97.7 141.9 144.8 10
Slide 16: 03 Business Performance
03 | Business Performance 5|G eu... b meraven | ooo | oer
Slide 17: Group revenue improved by +3% vs. FY21
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Group revenue improved by +3% vs. FY21 FY22 Revenue vs pcp (A$) Revenue commentary $ Revenue & % of Group FY20 FY21 FY22 Australia 323.2 340.6 319.8 • Sales grew by 7% on the prior period $340.6m 81% • Strong perf
Slide 18: Revenue by state
Financial Business Strategic Summary & Overview Revenue by state results performance focus FY23 Outlook • NSW A$m Net Sales AU FY22 FY21 % Change ‒ Strong revenue growth driven by Commercial & Builders NSW 124.7 111.8 11.6% QLD 60.6 59.8 1.4% • VIC SA 26.7 24.2 10.5% VIC 88.1 85.7 2.8% ‒ Challenging
Slide 19: Supply chain update
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Supply chain update Supply Chain Risk Mitigation • Proactive inventory build through increased safety stock levels of in- Covid related disruptions of suppliers in Asia demand products • Supplier regional diversif
Slide 20: 04 Strategic Update
04 | Strategic Update |G GWA Souptinie | METHVEN dorf
Slide 21: Good progress with key strategic initiatives
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Good progress with key strategic initiatives • Win the Plumber ‒ Increased engagement with ANZ plumbers • Innovate through design & partnership ‒ 5 year NPD roadmap completed ‒ SKU reviews completed • Customer exp
Slide 22: Committed executive team
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Committed executive team U Meyerhans MD & CEO • Aligned executive team ‒ Relevant mix of experience C Sunaryo C Norwell M Hayes C Scott Supply/Innovation Sales & UK Marketing CFO • Clear ownership of strategy ‒ Ea
Slide 23: Defining a compelling brand and customer value proposition
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Defining a compelling brand and customer value proposition • 3 phases of research conducted WE CONFIRMED OUR MARKET LEADER POSITION Caroma is the #1 most well known brand across ANZ markets. Methven is known for i
Slide 24: Digital
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Digital • Digital tools for customer implemented on caroma.com.au ‒ Virtual reality & augmented reality ‒ 3D planning tools ‒ Virtual tour of flagship store in Alexandria, NSW • Digital engagement of products allo
Slide 25: ERP implementation update
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook ERP implementation update • Implementation of ERP/CRM across ANZ • Short term impact on customers – planned to be fully resolved in H1, FY23 • Next steps – Ongoing focus on internal efficiencies and customer exper
Slide 26: 05 Summary and FY23 Outlook
05 Summary and FY23 Outlook 25
Slide 27: Pleasing FY22 performance
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook Pleasing FY22 performance proactively navigating challenging operating conditions • Improved financial performance FY22 vs FY21 • Balance sheet remains solid • Cash flow impacted by an increase in working capital
Slide 28: FY23 outlook
Financial Business Strategic Summary & Overview results performance focus FY23 Outlook FY23 outlook¹ Key focus FY23 commentary • Positive sentiment across key construction segments Key Markets ‒ Commercial – continued demand for Care and signs of recovery for New Build Positive for GWA ‒ Residential
Slide 29: 06 Q&A
06/Q&A 23|G Sp unites | METHVEN | dorf
Slide 30: 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 31: 06 Appendix
07 | Appendix 30|G Sr nis | METHVEN | | dorf
Slide 32: FY23 Key Assumptions
FY23 Key Assumptions1 Area Assumption Australian market backdrop BIS total building activity data2 is indicating market growth of ~3% in FY23 Price increase ANZ effective 5% price increase from 1 July 2022 D&A (depreciation and amortisation) ~$7.5-8.5m excluding the impact of IFRS 16. Including the
Slide 33: Increasing presence in Commercial segment
Increasing presence in Commercial segment Segment1 Category Valves, 1% Builder, 14% Basins, Sinks, Tubs & Baths, 18% Sanitaryware, Sub-segment1 43% Project, 25% Resi, 14% Merchant, Multi-Resi, 61% 4% Taps & Showers, 38% Commercial, Geography R&R, 61% 21% Brand United Kingdom, 7% Asia, 1% Other New Z
Slide 34: Australian Market Context – residential completions expected to strengthen in FY23
Australian Market Context – residential completions expected to strengthen in FY23, multi-residential to recover in FY23 Residential¹ Multi - Residential² 160,000 120,000 140,000 Quantity Completed Annually 100,000 Quantity Completed Annually 120,000 80,000 100,000 80,000 60,000 60,000 40,000 40,000
Slide 35: Australian Market Context – commercial work done expected to improve FY23 onwards
Australian Market Context – commercial work done expected to improve FY23 onwards, A&A to continue at elevated levels Commercial¹ Alterations & Additions² 60,000 12,000 50,000 10,000 $m Approved Annually $m Work Done 40,000 8,000 30,000 6,000 20,000 4,000 10,000 2,000 0 0 Actual Forecast Actual Fore
Slide 36: Residential completions expected to remain strong during FY23
Residential completions expected to remain strong during FY23, despite approvals declining from the historical highs. (Completions’ lag vs. approvals ~15 months) 160,000 140,000 120,000 Quantity Completed Annually 100,000 12 mths 15 mths 80,000 12 mths 60,000 40,000 20,000 0 FY-2010 FY-2011 FY-2012
Slide 37: Results Presentation
Results Presentation Year ended 30 June 2022 15 August 2022 36