Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — FY2023 Earnings Presentation
25 slides from Reliance Worldwide's earnings presentation, Aug 21, 2023
Slide 1: FY23 Results Presentation
FY23 Results Presentation 21 August 2023 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 (21 August 2023). 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: FY23 Overview
FY23 Overview Resilient performance despite significant economic headwinds Ongoing outperformance relative to market ▪ 9% constant currency sales growth including EZ-Flo1, 3% excluding EZ-Flo Resilience of core R&M market sector reconfirmed ▪ Focus on non-discretionary repair projects and backlog of
Slide 4: FY23 Financial Highlights
FY23 Financial Highlights All figures in US$ Net sales Adjusted EBITDA Adjusted NPAT $1,243.8 million $274.6 million $ 155.7 million +6% growth overall1 +2% on pcp -4% on pcp +9% constant currency growth +5% on pcp in constant currency Cash generated from operations Net leverage ratio3 Final dividen
Slide 5: FY23 Operational Highlight: 2 new product ranges launched
FY23 Operational Highlight: 2 new product ranges launched SharkBite Max and PEX-a/Expansion Fitting range launched in Americas ▪ North American launch on 23 March 2023 ▪ 5-phase SKU rollout over 15 months, completion expected end of FY24 ▪ Phases 1 and 2 completed, Phase 3 now underway ▪ Transfer of
Slide 6: FY23 Operational Highlight: manufacturing reconfiguration
FY23 Operational Highlight: manufacturing reconfiguration Reshaping of Australia manufacturing footprint with production transferred to the US ▪ SharkBite Max design has enabled some manufacturing and all assembly of North American product to shift from Australia to the US ▪ Injection moulding of al
Slide 7: FY23 Performance Summary
FY23 Performance Summary US$ million FY23 FY22 % Change Commentary ▪ Constant currency sales growth of 9% Net Sales 1,243.8 1,172.2 6% ▪ Constant currency sales growth of 3% excl. EZ-Flo2 1 Adjusted EBITDA 274.6 268.7 2% ▪ Stronger US$ adversely impacted reported results from Adjusted EBITDA margin
Slide 8: FY23 Adjusted EBITDA
FY23 Adjusted EBITDA Operating margin improvement in 2nd half +2% Commentary +5% ▪ Constant currency Adjusted EBITDA up 5% ▪ FX translation headwinds due to US$ strength vs A$ and £ ▪ Adjusted EBITDA margin improved in second half as sales of lower cost brass inventory flowed through to COGS ▪ Highe
Slide 9: Segment results: Americas
Segment results: Americas Revenue and EBITDA growth from EZ-Flo acquisition US$m FY23 FY22 % Change Commentary Net Sales 890.1 791.0 13% ▪ Sales growth of 13% driven by EZ-Flo and price increases Adjusted EBITDA1, 2 159.5 133.8 19% ▪ 4% sales growth excluding EZ-Flo Adjusted EBITDA margin (%) 17.9%
Slide 10: Segment results: Asia Pacific
Segment results: Asia Pacific Transfer of SharkBite manufacturing to the US impacted volumes A$m FY23 FY22 % Change Commentary Net Sales 282.7 293.5 (4%) ▪ Sales declined by 4% Adjusted EBITDA1 47.2 58.7 (20%) ▪ External sales down 1% Adjusted EBITDA margin (%) 16.7% 20.0% (330bps) ▪ Australia sales
Slide 11: Segment results: EMEA
Segment results: EMEA UK sales up 7%, Continental Europe sales down 5% on pcp £m FY23 FY22 % Change Commentary Net Sales 226.0 218.8 3% ▪ EMEA external sales up 4% on pcp in local currency Adjusted EBITDA1, 2 72.9 74.3 (2%) ▪ UK external sales up 7% on pcp mainly driven by Adjusted EBITDA margin (%)
Slide 12: Cash flow from operations up 110%
Cash flow from operations up 110% Cash flow performance Commentary US$m FY23 FY22 ▪ Cash generated from operations up 110% Adjusted EBITDA1 274.6 268.7 Cash generated from operations 292.7 139.6 ▪ Lower working capital as a result of inventory reductions Operating cash flow conversion 107% 52% ▪ Ope
Slide 13: Net debt reduced by $116.1m
Net debt reduced by $116.1m Debt metrics Commentary US$m 30-Jun-23 30-Jun-22 ▪ Net debt decreased by $116.1m since 30 June 22 Cash and cash equivalents 16.6 27.7 ▪ Total committed debt facilities of $1,050M: Gross debt 451.7 578.7 ▪ Unutilised committed facilities of $625m Net debt1 435.0 551.1 ▪ We
Slide 14: Outlook for FY24
1 Outlook for FY24 Continued resilience of R&M market tempered by uncertainty around larger remodel Overall Commentary ▪ RWC consolidated revenues expected to be down by low single digit percentage points in FY24, lower sales in most markets ▪ Targeting stable operating margins for full year FY24 vs
Slide 15: Outlook for FY24
1 Outlook for FY24 Asia Pacific Outlook ▪ Current end-market exposure is 60% new housing, 40% repair, maintenance and remodel ▪ 21% decline in Australian new housing commencements – sales are expected to be lower in FY24 ▪ Inter-company sales will also be significantly lower in FY24 due to transfer
Slide 16: Our Focus for 2024
Our Focus for 2024 Position RWC to reap benefits of a stronger, fitter business once demand returns ▪ Everyone safe every day: deliver further progress in Health and Safety performance ▪ Continue above market growth in all key geographies ▪ Execute on new product initiatives launched in 4th Quarter
Slide 17: Plumbing matters. We make it better.
Plumbing matters. We make it better.
Slide 18: Appendix
Appendix Plumbing Matters. We Make It Better.
Slide 19: RWC is a global growth-orientated building products company
RWC is a global growth-orientated building products company with defensive end-market exposures Global plumbing solutions in a large and Portfolio of plumbing solutions underpinned growing market by in-house R&D Track record of creating value from M&A Resilient earnings profile due to R&R exposure A
Slide 20: Strategy Overview
Strategy Overview Creating value through product leadership Solutions for Value for the Industry leading the job site distributor execution Smart product solutions that improve Increasing value for the distributor Premium quality products and contractor productivity, enable the DIYer, while providin
Slide 21: Outlook: Americas
Outlook: Americas Demand Environment: ▪ Remodelling activity expected to decline by mid-single digits in nominal $ in FY24 (refer Leading Indicator of Remodelling Activity chart at left) ▪ Lower turnover of existing housing stock a headwind in FY23, expected to persist in FY24 ▪ New home constructio
Slide 22: Outlook: Asia Pacific
Outlook: Asia Pacific Australian New Dwelling Demand Environment: Commencements1,2 ▪ Australia end-market exposure is 60% new housing, 40% repair, maintenance and remodel 200,000 ▪ 21% decline in new housing commencements in 150,000 21% decrease in new housing Australia in 12 months ended 31 Mar 23
Slide 23: Outlook: EMEA
Outlook: EMEA New Orders for Construction: All New Housing Demand Environment: 4,250 (£m)1 ▪ More challenging macroeconomic conditions in EMEA 4,000 versus other two regions 3,750 ▪ UK new home construction activity has been tracking 3,500 lower 3,250 3,000 Revenue: 2,750 ▪ Sales expected to be down
Slide 24: RWC's Capital Management approach
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 Acquisitions mar
Slide 25: FY23 Adjustment Items
FY23 Adjustment Items FY23 Tax US$ million FY23 EBITDA FY23 EBIT FY23 NPAT Expense FY23 Reported 276.1 223.5 (51.5) 139.7 Adjusted for: Restructuring costs 6.0 6.0 (1.5) 4.5 SharkBite Max one-off costs 1.6 1.6 (0.3) 1.3 Australia lead-free brass transition costs 1.6 1.6 (0.5) 1.1 EZ-Flo costs to ach