Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — FY2022 Earnings Presentation
30 slides from Reliance Worldwide's earnings presentation, Aug 22, 2022
Slide 1: FY22 Results Presentation
FY22 Results Presentation 22 August 2022 RELIANCE WORLDWIDE CORPORATION LIMITED ABN 46 610 855 877
Slide 2: Important Notice
Important Notice This presentation contains general information about Reliance Worldwide Corporation Limited’s activities at the date of presentation (22 August 2022). 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: FY22 Results Overview
FY22 Results Overview 3
Slide 4: FY22: Record earnings despite unprecedented challenges
FY22: Record earnings despite unprecedented challenges Built on the step-up in FY21 revenues and continued strong execution Consolidation of activity levels and retention of FY21 volume gains ▪ Net sales growth of 17% versus pcp, different drivers in each region: • Americas 26% sales growth, 15% und
Slide 5: FY22 Financial Highlights
FY22 Financial Highlights All figures in US$ Net sales Adjusted EBITDA Adjusted NPAT $1,172.2 million $268.7 million $161.4 million +17% growth overall1 +3% on pcp +2% on pcp +5% excluding EZ-Flo -3% excluding EZ-Flo Operating cash flow Net leverage ratio3 Final dividend $139.6 million 2.10x US5.0 c
Slide 6: Strong 2-year performance record
Strong 2-year performance record FY22 performance has consolidated strong volume growth of FY21 Net Sales Adjusted EBITDA Adjusted NPAT US$m US$m US$m +50% +59% +87% 1,200 1,172 268.7 260.7 180 158.8 161.4 1,002 250 160 1,000 140 780 200 800 168.6 120 150 100 86.5 600 80 100 60 400 40 200 50 20 0 0
Slide 7: The story of the year
The story of the year We proved our ability to execute in challenging times and deliver for our customers Health & Safety performance improved ▪ Reportable Injury Frequency Rate (RIFR)1 reduced 15% to 5.17 ▪ Board Health & Safety Committee established, best practice benchmarking review underway COVI
Slide 8: Group Financial Performance
Group Financial Performance 8
Slide 9: Summary of FY22 Performance
Summary of FY22 Performance % Change % Change US$m FY211 FY22 FY21 FY20 ▪ FY22 net sales 17% higher than pcp, including Net Sales 1,001.6 1,172.2 17% 50% contribution from EZ-Flo for 7.5 months Adjusted EBITDA 260.7 268.7 3% 59% ▪ Revenue growth driven by initial contribution from EZ-Flo, price incr
Slide 10: FY22 Adjusted EBITDA up 3%
FY22 Adjusted EBITDA up 3% Lower volumes due to US freeze in pcp; price increases offset higher costs US$m ▪ FY22 Adjusted EBITDA increased 3% on pcp ▪ Realised price increases to offset cost inflation of 9.5% for the year ▪ Adjusted EBITDA margin of 22.9% reflects inclusion of EZ-Flo ▪ Excluding EZ
Slide 11: Segment results: Americas
Segment results: Americas Reported net sales up 26% over pcp, underlying sales growth of 15% % % 2-Year US$m FY21 FY22 Change Change CAGR FY20:FY22 FY21 FY20 Net Sales 630.0 791.0 26% 60% 26% Americas Quarterly Revenues (excl. EZ-Flo) - RWC 630.0 666.2 6% 34% 16% US$m - EZ-Flo - 124.8 - - - 200 Adju
Slide 12: Americas: 26% reported revenue growth in FY22
Americas: 26% reported revenue growth in FY22 Includes contribution from EZ-Flo; underlying sales growth of 15% Americas Net Sales US$m ▪ Sales up 26% reflecting the inclusion of sales from EZ-Flo from Nov 2021 onwards and the impact of price increases +26% ▪ Sales growth excluding EZ-Flo of 6% due
Slide 13: Segment results: Asia Pacific
Segment results: Asia Pacific Sales growth of 6% on pcp, up 20% on a 2-year pcp basis A$m FY21 FY22 % Change % Change 2-Year CAGR FY22 vs FY21 FY22 vs FY20 FY20:FY22 ▪ APAC external sales growth of 12% driven Net Sales 277.3 293.5 6% 20% 10% by strong new residential construction Adjusted EBITDA 66.
Slide 14: Segment results: EMEA
Segment results: EMEA Net sales up 1% on pcp, up 27% on a 2-year pcp basis ▪ EMEA net sales up 1% on pcp £m FY21 FY22 % Change % Change 2-Year CAGR FY22 vs FY21 FY22 vs FY20 FY20:FY22 ▪ 4th quarter sales up 7% on pcp - catch up Net Sales 216.6 218.8 1% 27% 13% of sales delayed in Q3 as a result of U
Slide 15: Operating cash flow impacted by inventory increases
Operating cash flow impacted by inventory increases Cash flow performance Commentary US$m FY21 FY22 ▪ Cash flow from operations down 44% due to increase in working capital Adjusted EBITDA 260.7 268.7 ▪ Higher inventory levels maintained to ensure continuity of Changes in working capital (11.1) (129.
Slide 16: Increase in net debt to fund acquisitions in FY22
Increase in net debt to fund acquisitions in FY22 Debt metrics Commentary US$m 30 Jun 2021 30 Jun 2022 ▪ Net debt increased by $420.6m since 30 Jun 21 Cash and cash equivalents 21.3 27.7 ▪ Increase is mainly due to acquisition of LCL ($28m) and EZ-Flo ($332m) Gross debt 151.7 578.7 ▪ $800m in new co
Slide 17: FY23 capital expenditure outlook
FY23 capital expenditure outlook Capital Expenditure US$m Commentary 70 ▪ FY23 Capex forecast to be in the range of $60 million to $70 million 60 ▪ Group-wide SAP upgrade to S/4 variant a generational change in financial IT platform 50 ▪ Strategic initiatives planned for FY23: 40 ▪ New product initi
Slide 18: EZ-Flo Update
EZ-Flo Update Integration of EZ-Flo with RWC has been completed ▪ Net Sales of $124.8m in 7.5 months since acquisition by RWC • Period prior to RWC ownership: $169m for 12 months to July 21 ▪ EBITDA of $15.6m (for 7.5 months since acquisition by RWC) ▪ Price increases implemented in 3rd Quarter have
Slide 19: Strategy and Outlook
Strategy and Outlook 19
Slide 20: RWC strategy summary
RWC strategy summary Creating value through product leadership 20
Slide 21: Strategy overview
Strategy overview Our strategy remains focused on driving growth in core and adjacent markets ▪ Solutions for the end customer: Pro-plumbers and DIY customers • Smart product solutions which make the lives of our end customers easier and improves their productivity ▪ Strong Distributor relationships
Slide 22: Outlook for FY 2023
Outlook for FY 2023 1 Uncertain economic and geopolitical outlook, R&R indicators remain robust Positive Outlook Factors: ▪ Backlog of repair and remodel work should underpin volumes in the short term ▪ Consumer / household balance sheets are generally strong post-COVID and unemployment is near reco
Slide 23: Segment performance drivers: Americas
Segment performance drivers: Americas Slowing growth outlook for US home improvement in FY23 Outlook: ▪ Economic outlook for the US and Canada has softened since 1HY22 LIRA inputs and outputs ▪ Rising interest rates and declining consumer are nominal sentiment are potential headwinds for R&R activit
Slide 24: Segment performance drivers: Asia Pacific
Segment performance drivers: Asia Pacific Australian new residential construction activity should underpin volumes in FY23 Australian Residential Approvals1 Outlook: ▪ Increases in new residential dwelling commencements 200,000 7% drop in annual should underpin volumes despite recent declines in new
Slide 25: Segment performance drivers: EMEA
Segment performance drivers: EMEA Inflation and recession risk are headwinds for UK repair and remodel activity Builders Merchant Building Index1 Outlook 180 170 ▪ Remodel demand in the UK may be challenged by high 160 150 rates of inflation, supply chain bottlenecks and skilled labour 140 shortages
Slide 26: Priorities for FY23
Priorities for FY23 Regardless of economic conditions our focus will be on growing market share and leveraging our channel partner relationships ▪ Continue above-market growth in all key geographies ▪ Continued focus on operational excellence and execution, remaining agile and responsive to changing
Slide 27: Summary
Summary Resilience of the business has been demonstrated through the past two years ▪ RWC is focused on creating value through product leadership • Solutions for the end-user: improving contractor productivity, enabling the DIYer • Value for distributors: increasing value on their shelf, providing b
Slide 28: Q&A
Q&A 28
Slide 29: Reconciliation of FY22 Reported NPAT and Adjusted NPAT
Appendix: Reconciliation of FY22 Reported NPAT and Adjusted NPAT FY22 EBITDA FY22 EBIT FY22 NPAT Impact ($m) Impact ($m) Impact ($m) Streamlabs sale – gain on disposal of assets (2.4) (2.4) (1.9) LCL acquisition: Transaction costs 1.7 1.7 1.7 Inventory Step Up - unwound over 3 months 0.3 0.3 0.3 EZ-
Slide 30: Appendix: RWC's Capital Management approach
Appendix: RWC’s Capital Management approach Capital management approach aims to minimise the cost of capital and ensure ongoing access to funding to meet future requirements Strong Financial Value creation Capital management Focus Improving long term Organic Capital Capital Consistent Capital Acquis