Attached is the Chairman s Address and CEO s presentation for the 2018 Annual General Meeting.

Transcription

1 ASX Announcement 25 October AGM Chairman s Address and CEO Presentation Attached is the Chairman s Address and CEO s presentation for the 2018 Annual General Meeting. Gavin Street Company Secretary About the Reece Group Reece Group is a leading distributor of plumbing, waterworks and HVAC-R products to commercial and residential customers through 800 branches in Australia, New Zealand and the United States. Established in 1920 and listed on the Australian Securities Exchange (ASX: REH), Reece Group has approximately 8,000 employees committed to improving the lives of their customers by striving for greatness every day. For further information on Reece Group and its portfolio of businesses please visit Burwood Highway Burwood Victoria 3125 Private Bag 107 Burwood Victoria 3125 T F ABN

2 Chairman s Address Financial year 2018 was another record result for Reece, with a sales revenue up 10.7% to $2.7b and net profit after tax up 6.1% to $225m. We finalised acquisitions in Australia, New Zealand, and the United States and completed a wellsupported debt and equity raising. We announced the retirement of Bruce Wilson (senior) after almost 50 years with the company and Ron Pitcher after nearly 15 years as a Director. I would like to thank them both for their contributions. Additionally, the Board added new capability with the appointment of Andrew Wilson as a Non-Executive Director, effective 1 September The Board was very pleased to announce an increase in dividend. Total dividends paid and to be paid for the year ending 30 June 2018 were cents per share. The final fully franked dividend of cents per share will be paid today, the 25 th of October I will now pass you over to our CEO & MD, Peter Wilson, who will take you through our financial year 2018 results and give an indication of the company s performance in the first quarter of financial year Mr Alan Wilson Executive Chairman 118 Burwood Highway Burwood Victoria 3125 Private Bag 107 Burwood Victoria 3125 T F ABN

3 2018 AGM 25 October 2018

4 Important Notice and Disclaimer Disclaimer The material in this presentation has been prepared by Reece Limited (ABN ) ( Reece") (ASX:REH) and is general background information about Reece's activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete. In particular you are cautioned not to place undue reliance on any forward looking statements regarding Reece's belief, intent or expectations with respect to Reece s businesses, market conditions and/or results of operations. Although due care has been used in the preparation of such statements, actual results may vary in a material manner. No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including Reece). Subject to any continuing obligations under applicable law or any relevant listing rules of the Australian Securities Exchange, Reece disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements in this presentation to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Nothing in this presentation shall under any circumstances create an implication that there has been no change in the affairs of Reece since the date of these materials. Information in this presentation, including any forecast financial or other information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities. Before acting on any information you should consider the appropriateness of the information having regard to these matters and, in particular, you should seek independent financial advice. Non-IFRS Financial Information Reece uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These measures are collectively referred to as non-ifrs financial measures. Although Reece believes that these measures provide useful information about the financial performance of Reece, they should be considered as supplemental to the measures calculated in accordance with Australian Accounting Standards and not as a replacement for them. Because these non-ifrs financial measures are not based on Australian Accounting Standards, they do not have standard definitions, and the way Reece calculates these measures may differ from similarly titled measures used by other companies. Readers should therefore not place undue reliance on these non-ifrs financial measures. Note: All financial amounts contained in this presentation are expressed in Australian dollars unless otherwise stated. Any discrepancies between totals and the sum of components in tables contained in this presentation are due to rounding. 2

5 CEO & MD s Address Mr Peter Wilson 3

6 2018 year in review Financial Performance Operational Highlights MORSCO Preview to FY19 4

7 2018 year in review Financial Performance Operational Highlights MORSCO Preview to FY19 5

8 Financial Performance Sales Revenue FY17 - $2,429m FY18 - $2,689m % 6

9 Financial Performance Sales Revenue (A$m) CAGR 10.9% Column1 $2,085 $2,276 $2,429 $2,689 $1,776 FY14 FY15 FY16 FY17 FY18 7

10 Financial Performance EBITDA FY17 - $357m FY18 - $378m % 8

11 Financial Performance EBITDA (A$m) CAGR 13.7% $331 $357 $378 $280 $227 FY14 FY15 FY16 FY17 FY18 9

12 Financial Performance NPAT FY17 - $212m FY18 - $225m % 10

13 Financial Performance NPAT (A$m) CAGR 16.2% 11

14 2018 year in review Financial Performance Operational Highlights MORSCO Preview to FY19 1 / Customers 2 / People 3 / Innovation 4 / Community 12

15 Customers

16 Customer Highlights Highlights Continued network growth Strong uptake of max New innovative products Strengthening customer relationships World-class net promoter score 14

17 People

18 People Highlights Highlights Workplace of the Future Strengthening our graduate and trainee programs Employee NPS Enabling Leadership Programs

19 Innovation

20 Innovation Highlights Highlights Opened our design and innovation centre, NEXT Superseed and goodwork Innovation toolkit Digitising the customer s experience 18

21 Community

22 Community Highlights Highlights Solar Installation Program The Reece Grant 20

23 2018 year in review Financial Performance Operational Highlights MORSCO Preview to FY19 21

24 MORSCO Strategic platform in Sun Belt region Access Opportunity for future organic and acquisition-led growth Unique opportunity for long term growth to biggest plumbing, HVAC, waterworks markets Leverage expertise and relationships Experienced management team 22

25 MORSCO A$5.0bn sales distribution business 23

26 FY18 Summary

27 FY18 Summary Strong financial position Investing in the future World-class customer experience Innovation and digitisation focus Acquisition of MORSCO 25

28 2018 year in review Financial Performance Operational Highlights MORSCO Preview to FY19 26

29 Australia

30 Underlying Australian economic indicators remain supportive Dwelling approvals (000 s) $176 $168 $149 $135 $165 $199 $230 $238 $222 $231 $198 Dwelling completions (000 s) $ $151 $146 $148 $162 $192 $202 $219 $211 $216 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E Non-residential commencements ($m) Alterations and additions ($m) $42,885 $44,951 $47,051 $31,131 $32,897 $37,224 $34,466 $36,962 $30,618 $35,361 $39,291 $7,907 $7,708 $7,601 $7,756 $7,339 $7,269 $7,312 $7,309 $7,015 $7,019 $7,130 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 EFY19 FY19E FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E Source: BIS Oxford Economics 28

31 United States

32 Positive momentum sustained in the US market Single and multi-family housing starts (000 s) , year average Single Family Multi-Family Repair and remodelling spending (US$bn) $293 $277 $266 $253 $254 $311 $327 $347 $367 $387 $400 1, , E 2019E 2020E E 2019E Source: National Association of Realtors Mortgage Bankers Association, Fannie Mae, National Association of Home Builders as of May 2018, John Burns Consulting as of April 2018 Source: L.E.K., U.S. Census, and NAHB Non-residential building construction expenditure (US$bn) $480 $489 $434 $446 $392 $348 $355 $360 $337 $515 $547 Infrastructure construction spending (US$bn) $217 $220 $217 $209 $199 $239 $228 $228 $237 $250 $ E 2019E E 2019E Source: FMI as of Q Source: FMI as of Q

33 Q1FY19 31

34 Q1FY19 (AUD$m) $647 $1,379 1st Quarter Sales Revenue $652 $40 $40 $732 Q1 FY 2018 Reece Organic Growth Reece Acqusition Growth Total Reece Morsco Q1 FY

35 Thank You 33

36 2018 AGM 25 October 2018