Slide 1: ASX cover letter: Annual Results Presentation
GWA Group Limited S ABIL 15 055 964 280 t 6173109 6000 f 617 3852 2201 \ww.gwagroup.com.aut Level 2, HO (South Tower) 520 Wickham Street Fortitude Valley QLD 4006 GPO Box 1411 Brisbane QLD 4001 16 August 2011 ASX On-Line Manager Company Announcements Australian Securities Exchange Dear Sir Annual Re
Slide 2: For personal use only
GWA Group Limited GS Sa = . tor ally | | mn — as | Br |
Slide 3: Annual Results Presentation August 2011
For personal use only Annual Results Presentation 16 August 2011 Presented by: Peter Crowley Title: Managing Director
Slide 4: Major Successes and Challenges for the Year
Major Successes and Challenges for For personal use only the Year √ Delivering on growth strategy - Acquired Gliderol garage doors business in February 2011 √ Sound operating performance for all businesses despite minor disruption of EBA negotiations √ Continued market development improved sales per
Slide 5: Acquisitions have Driven Profit Growth
Acquisitions have Driven Profit Growth For personal use only Sales up by 11% (flat on like for like basis) Trading EBIT of $107.2 million up 13% EPS from continuing operations up 14% to 21 cents Full year dividend maintained at 18 cents Increased cash generated from operations of $126 mill
Slide 6: Key Performance Indicators are Positive
Key Performance Indicators are Positive For personal use only Total Injury Frequency Rate improved 14% EBIT margin up from 14.4% to 14.8% Return on Funds employed up from 16.4% to 17.3% Working capital to sales down from 23.9% to 21.8% (target 20%) Capital efficiency improved with net debt
Slide 7: Results – Year to June 2011
Results –Year to 30 June 2011 For personal use only Full Year Full Year $Million 2011 2010 Change Sales Revenue 726.4 656.8 10.6% Trading EBIT 107.2 94.5 13.3% EBIT Margin 14.8% 14.4% Trading Profit after Tax for Continuing Businesses 63.4 55.5 14.3% Net Profit after Tax Incl Discontinued Businesses
Slide 8: Major Variations in Trading EBIT
Major Variations in Trading EBIT For personal use only $M 100 120 20 40 60 80 0 2010 94.5 Improved product mix and and Mix Volume benefit of BER spending 4.0 Strong Australian currency required price repositioning Price -6.4 Commodity and wage escalation Increases offset benefit of Australian
Slide 9: Ongoing Restructuring Continues to Improve Productivity
Ongoing Restructuring Continues to For personal use only Improve Productivity Total Employees June 2010 1944 Acquisitions 279 Divestments Nil General reductions (73) Total Employees June 2011 2150
Slide 10: Completions have Lagged the Underlying Improvement in Building Approvals
Completions have Lagged the Underlying For personal use only Improvement in Building Approvals New Dwelling Activity 12 Month Moving Average 190,000 180,000 Moving Annual Numbers 170,000 Source: BIS Shrapnel 160,000 150,000 140,000 130,000 Source: BIS Shrapnel 120,000 3 4 5 6 7 8 9 0 f 03 04 05 06 0
Slide 11: Redefined Businesses now Operating Effectively in Expanded Structure
Redefined Businesses now Operating For personal use only Effectively in Expanded Structure Businesses are now managed and reported as • Bathrooms & Kitchens • Heating & Cooling • Door & Access Systems • Commercial Furniture Defined markets generate approximately $4 -5 billion in sales activity p
Slide 12: Segment Performance – Bathrooms & Kitchens
For personal use only Results –Year to 30 June 2011 Segment Performance – Bathrooms & Kitchens $Million 2011 2010 Change Sales Revenue 339.9 337.4 1% Segment Result 77.6 74.2 5% EBIT Margin 22.8% 22.0%
Slide 13: Segment Performance – Bathroom & Kitchens
Segment Performance – Bathroom & For personal use only Kitchens Underlying sales up 1% with strong first half offset by slower activity in second half Wetherill Park performance improved consistently during the year Major focus on improving supply chain management and value to customers Furt
Slide 14: Segment Performance – Door & Access Systems
Results – Year to 30 June 2011 For personal use only Segment Performance – Door & Access Systems $Million 2011 2010 Change Sales Revenue(1) 114.0 82.9 38% Segment Result 17.2 14.6 17% EBIT Margin 15.0% 17.6% (1) Includes 5 months Gliderol sales of $29 million in 2011
Slide 15: Segment Performance – Door & Access Systems
Segment Performance – Door & Access For personal use only Systems Australian sales up 38% due to Gliderol acquisition and a 3% underlying improvement despite low Queensland building activity Growth in architectural and commercial market segments with Hillaldam distributorship starting to show growth
Slide 16: Segment Performance – Heating & Cooling
Results –Year to 30 June 2011 For personal use only Segment Performance – Heating & Cooling $Million 2011 2010 Change Sales Revenue(1) 195.3 161.5 21% Trading EBIT 17.2 14.6 18% EBIT Margin 8.8% 9.0% (1) Includes Brivis sales for 12 months in 2011 and 3 months in 2010
Slide 17: Segment Performance – Heating & Cooling
Segment Performance – Heating & For personal use only Cooling Growth in Heating & Cooling is a 2-3 year strategy driven by efficiency gains plus new product and market development Dux - Sales down 5% from Government rebate driven sales in prior year. Good recovery in second half EcoSmart – Sales dow
Slide 18: Segment Performance – Commercial Furniture
Results – Year to 30 June 2011 For personal use only Segment Performance – Commercial Furniture $Million 2011 2010 Change Sales Revenue 77.3 74.8 3% Trading EBIT 8.9 5.7 56% EBIT Margin 11.6% 7.6% Strong demand from Government Building Education Revolution (BER) program continued until third quarter
Slide 19: Working Capital Improvement Reflects Continued Focus on Supply Chain Management
Working Capital Improvement For personal use only Reflects Continued Focus on Supply Chain Management $Million 2011 2010 Cash Generated from 126.0 105.3 Operations Restructuring cash outflows 3.3 6.4 Capital Expenditure (Net) 24.6 14.0
Slide 20: Financial Metrics Remain Strong
Financial Metrics Remain Strong For personal use only 2011 2010 Net Debt ($M) 198.1 176.0 Gearing Ratio (Net Debt / Net Debt Plus 31% 32% Equity) Leverage Ratio (Net Debt / EBITDA) 1.53 1.71 Debt Maturity Profile July 2014 200.0 July 2016 100.0
Slide 21: Ordinary Dividend Maintained
Ordinary Dividend Maintained For personal use only $Million 2011 2010 Trading profit after tax 63.4 55.5 Trading earnings per share 21.0¢ 18.5¢ Reported earnings per share 21.0¢ 16.2¢ Ordinary Dividend Interim 9.5¢ 9.5¢ Final 8.5¢ 8.5¢ Total (fully franked) 18.0¢ 18.0¢
Slide 22: GWA does not support a Carbon Tax
GWA does not support a Carbon Tax which Impacts For personal use only Competitiveness of Australian Manufacturing on Top of Strong A$ Larger sectors such as motor Australian Greenhouse Gas Emissions by Process 2009-10 vehicles and agriculture account for 31% of emissions but are excluded Tax on
Slide 23: So Everything Comes Back to Productivity
“So Everything Comes Back to For personal use only Productivity. It Always Does.” Glenn Stevens July 2011 Impact of high Australian currency and cost escalation on competitiveness must be addressed in 2011/12 This will require plant rationalisations with a greater proportion of sourcing offshore
Slide 24: Committed to Australian Manufacturing Where it Provides Competitive Advantage
We Are Committed to Australian For personal use only Manufacturing Where it Provides a Source of Competitive Advantage Wetherill Park will remain a core operation but will be phased back to focus on market service. Some further investment will be made to support our value proposition Dux Moss Va
Slide 25: GWA's Strategic Agenda for Inorganic Growth is Unchanged
For personal use only GWA’s Strategic Agenda for Inorganic Growth is Unchanged Capacity to fund acquisitions up to $100 million through debt and $300-$400 million through debt plus equity Focus is on growth through product (eg. Austral Lock) and/or market adjacencies (eg. Brivis / Gliderol) Bu
Slide 26: 2011/12 Outlook
2011/12 Outlook For personal use only Full year benefit from Gliderol acquisition will positively impact results Underlying demand expected to reduce 3-4% Profit and cash impact of restructure costs and capital requirements largely offset by property sales and working capital improvements Gi
Slide 27: For personal use only
GWA Group Limited GS Sa = . tor ally | | mn — as | Br |