Reliance Worldwide Corp. Ltd. · ASX:RWC
Reliance Worldwide — FY2019 Earnings Presentation
26 slides from Reliance Worldwide's earnings presentation, Aug 27, 2019
Slide 1: FY2019 Results Presentation
FY2019 Results Presentation 27 August 2019 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 (27 August 2019). 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: Agenda
Agenda 1. Highlights 04 2. Financial Performance 11 3. Segment Performance 17 4. Outlook 22 3
Slide 4: Highlights
Highlights 4
Slide 5: Key Business Highlights
Key Business Highlights FY2019 a record year: Adjusted Net Profit after Tax up 80% to $152 million Reported net sales growth of 43.5%: • First full year contribution from John Guest • Underlying sales growth in the Americas of 8.3% Strong earnings accretion post John Guest acquisition: • Basic e
Slide 6: FY2019 Financial Highlights
FY2019 Financial Highlights Net sales Adjusted EBITDA3 Adjusted NPAT3 $1.1 billion $263.2 million $152.0 million +43% growth overall +5.4% underlying growth on comparable +66% growth1 +80% growth1 basis1,2 Continued strong Balance Sheet Net operating cash flow sales growth from strength $178.9 milli
Slide 7: Strong earnings growth and cash returns
Strong earnings growth and cash returns Strong earnings accretion - EPS growth of 23% following John Guest acquisition Adjusted EPS (Cents) Dividends (Cents per Share) Total Dividends Declared (A$m) 80 19.4 10.0 20 71.1 9.0 9.0 70 18 15.8 8.0 16 60 14 7.0 6.5 12.3 6.0 50 12 6.0 42.1 5.0 10 5.0 40 4.
Slide 8: The story of the year
The story of the year FY2019 was a year of significant achievements for RWC Successful integration of John Guest and delivery of first year earnings performance and synergies ahead of forecast Strong net sales growth in Americas segment Leveraged expanded product portfolio across distribution
Slide 9: Strategic focus on revenue and earnings growth
Strategic focus on revenue and earnings growth RWC’s business fundamentals are stronger than ever RWC has strong core businesses in its two most important sales markets of the USA and UK A robust and diverse business across end users, channels, geographic reach, product, raw materials and techno
Slide 10: Strategic investment being made in key areas
Strategic investment being made in key areas Investment in R&D, people and capability to realise future opportunities R&D expenditure over FY2017 to FY2020(f) will more than double Investment in new product development and FY2020 key areas of investment: commercialisation to support penetration of
Slide 11: Financial Performance
Financial Performance 11
Slide 12: FY19 Consolidated Results
FY19 Consolidated Results (A$m) FY19 FY18 Variance Commentary Net sales up 43% over prior year (+37% on a constant currency Net Sales 1,104.0 769.4 43% basis) Revenue performance varied across 3 segments1: Reported EBITDA 242.5 135.4 79% EBITDA margin 22.0% 17.6% 440bps • Americas (+17%) • Asia
Slide 13: Year over Year Change in Net Sales
Year over Year Change in Net Sales All values in A$m Commentary Net sales up 43% (37% on a constant currency basis) driven by: First full year inclusion of John Guest Favourable foreign exchange movements for translation purposes One-off events in both periods that impacted net sales includi
Slide 14: Sound Cash Flow Generation from Operations
Sound Cash Flow Generation from Operations (A$m) FY19 FY18 Variance Commentary Reported EBITDA 242.5 135.4 + 79% Cash flow from operations1 generated $178.9 Changes in Working Capital (63.6) (10.5) - 505% million in FY2019, an increase of 43% over Cash flow from operations1 178.9 124.8 + 43% FY201
Slide 15: Capital expenditure
Capital expenditure FY2020 Forecast Capital Expenditure (A$m and % of Net Sales) Commenced Cullman Phase 1 Property acquisition Capacity expansion Expansion of product Production expansion construction of expansion completed, in Cullman supporting core PTC range, capacity and in the USA and UK Cullm
Slide 16: Balance Sheet Strength
Balance Sheet Strength Debt metrics (A$m) 30 June 2019 30 June 2018 Commentary Cash and cash equivalents 69.3 274.3 Strong balance sheet with pro forma net leverage of 1.67x at 30 June 20191 Gross debt 495.9 662.3 Higher working capital compared with 30 June 2018 to support a growing business: N
Slide 17: Segment Performance
Segment Performance 17
Slide 18: Segment Results – Americas
Segment Results – Americas (A$m) FY19 FY18 Variance Net sales1 653.9 559.7 + 17% EBITDA2 102.5 95.4 + 7% EBITDA margin 15.7% 17.1% (140 bps) Adjusted EBITDA3 105.3 96.0 + 10% Adjusted EBITDA margin 16.1% 17.2% (110 bps) Financial commentary Net sales grew 17% over the prior year with benefit of Jo
Slide 19: Year over Year Change in Net Sales – Americas
Year over Year Change in Net Sales – Americas Commentary Overall growth in reported sales 17% versus prior year. Major drivers: • The addition of John Guest revenues • Favourable impact of a weaker Australian dollar on translated revenue • Continued market penetration of SharkBite PTC fittings and
Slide 20: Segment Results – Asia Pacific
Segment Results – Asia Pacific (A$m) FY19 FY18 Variance Net sales1 249.1 232.0 + 7% EBITDA2 48.1 52.4 (8%) EBITDA margin 19.3% 22.6% (330bps) Adjusted EBITDA3 50.0 52.8 (5%) Adjusted EBITDA margin 20.1% 22.8% (270bps) Financial commentary Operational commentary Net sales growth of 7% versus the pr
Slide 21: Segment Results – EMEA
Segment Results – EMEA (A$m) FY19 FY18 Variance Net sales1 360.9 81.1 + 345% EBITDA2 95.8 8.3 n/m EBITDA margin 26.5% 10.2% n/m Adjusted EBITDA3 109.4 10.1 n/m Adjusted EBITDA margin 30.3% 12.4% n/m Financial commentary Operational commentary Net sales include $300.8 million from net sales of John
Slide 22: Outlook
Outlook 22
Slide 23: FY2020 Outlook
FY2020 Outlook Expect to achieve sales growth above that of the broader markets in which we operate The outlook for each of RWC’s regions for FY2020: • Americas: positive conditions, with modest growth in residential new construction and continued growth in remodel activity • Asia Pacific: Austr
Slide 24: FY2020 Earnings Guidance
FY2020 Earnings Guidance Earnings guidance will now be provided on a Net Profit after Tax (NPAT) basis, rather than EBITDA RWC currently expects FY2020 NPAT in the range of $150 million to $165 million This corresponds to an EBITDA range of $280 million to $305 million, inclusive of the effect o
Slide 25: Management Priorities FY2020
Management Priorities FY2020 Delivery of above market top line growth in all key geographies Realisation of John Guest related synergies Margin expansion through continuous improvement initiatives Targeted SG&A investment Operating cash flow generation – focus on reducing working capital
Slide 26: Thank you.
Thank you.