GWA : FY20 Results Presentation

17 August 2020

ASX On-Line

Manager Company Announcements

Australian Securities Exchange

Dear Sir

Annual Results Presentation for the Year Ended 30 June 2020

We enclose the following document for immediate release to the market.

• Annual Results Presentation

On 17 August 2020 at 10:00am (AEST), GWA will be hosting a webcast of its FY20 results briefing. The webcast is accessible via the GWA website at www.gwagroup.com.au.

This announcement has been authorised for release to the ASX by the GWA Board of Directors.

Yours faithfully

R J Thornton

Executive Director

Superior Solutions for Water

Results Presentation

Year ended 30 June 2020

17 August 2020

Disclaimer

This Presentation contains projections and other prospective statements that represent GWA's assumptions and views, including expectations and projections about GWA's business, the industry in which it operates and management's own beliefs and assumptions. Such matters require subjective judgement and analysis and may be based on assumptions which are incorrect. They may also be based on factors which are subject to significant uncertainties and contingencies which may be outside the control of GWA and are provided only as a general guide or statement, and should not be relied upon as an indication or guarantee of future performance. As such, GWA's actual performance may differ from those assumptions or projections set out in this Presentation.

This presentation contains non-IFRS financial measures to assist users to assess the underlying financial performance of the GWA. The non-IFRS financial measures in this presentation were not the subject of a review or audit by KPMG.

Unless otherwise stated, financials (including comparatives) reflect the adoption of IFRS 16 Leases and the impact of the May 2020 IFRS Interpretation Committee decision relating to IAS 12 Income Taxes.

2

01 Overview

3

Overview		Financial results		Strategic progress		Outlook		Appendix

Disciplined performance in challenging markets

Operational discipline mitigates significant amount of revenue decline from weaker market and COVID-19

• Merchant destocking in 1H FY20 and COVID-19 restrictions in 2H FY20 significantly impacted revenue
• However, maintained market share in Australia despite challenging market conditions
• Ongoing operational discipline mitigates significant component of revenue decline - Group EBIT margin 18.0% v 18.5% in FY19¹
• Continued strong cash generation and financial position - Board has determined 3.5 cent per share final dividend fully-franked

"Controlling the controllables"

• Significant improvement in Health and Safety (lead and lag metrics)
• Methven integration on track - sales teams fully integrated - synergies ahead of schedule: $3m delivered in FY20
• $9-12mcost out programme on track: $5.0m delivered in FY20
• Additional short-term cost reductions of $10.5m delivered in response to weak markets
• Consolidated distribution network to four key distribution centres in NSW, QLD, VIC and WA to drive operational efficiencies in FY21

Continue to execute superior water solutions growth strategy

• Continuing to invest in growth initiatives (Caroma Smart Command®, NPD) funded by cost savings
• Strengthened relationships with merchant partners drive core range extension (MVN and GWA product)
• Caroma Smart Command® installed at 49 sites - focus on sustainability and touchless / hygiene solutions in commercial bathrooms
• Commercial forward order bank remains strong and in growth - focused on core segment opportunities including Aged Care

Strong financial position to manage through current markets and position for growth

• Solid balance sheet maintained - liquidity enhanced in 2H FY20 and no significant near-term refinancing commitments

4	¹ Pro forma which includes Methven full year result in FY19

Overview		Financial results		Strategic progress		Outlook		Appendix

COVID-19 response: strongly positioned to manage through pandemic

Primary focus remains on health and safety of all people at GWA (staff and visitors)

• Enhanced safety protection (sanitiser, masks, temperature checks and increased cleaning) at all GWA sites
• All office-based staff supported to work remotely
• Implemented shift management / social distancing protocols (incl. staggered break times) at all manufacturing sites
• 112 staff furloughed across NZ and UK due to the impact of restrictions and shutdowns

Additional short-term cost reductions to partially mitigate the impact of COVID-19

• $10.5 million of short-term cost reductions achieved

Maintained continuity of supply in 2H FY20 (no COVID-19 disruption)

• Manufacturing supply partners prioritised GWA due to longer term exclusive arrangements
• Inventory management continues to ensure supply continuity

Strong financial position maintained

• $33m additional bank facilities obtained (not drawn)
• $283m in total bank facilities provides significant liquidity and flexibility to take advantage of opportunities that may arise
• $243m revolving facility does not mature until October 2022
• GWA remains highly cash generative - cash conversion ratio in FY20 96%

5

Overview		Financial results		Strategic progress		Outlook		Appendix

COVID-19 restrictions impacted Q4 revenue

Revenue vs pcp

H1 Q3 Q4 H2

				-2.7%
											-11.0%
-14.8%
-16.9%

Impact of restrictions

Australia

• 1H impacted by significant merchant destocking and weaker market conditions
• Q3 revenue was broadly in line with pcp
• Q4 sales impacted by COVID-19 with sales growth in consumer focused channel offset by declines in trade channels. No further destocking but anticipated restocking in Q4 did not materialise

H1	Q3	Q4	H2
0.7%
	-11.4%
			-20.8%
		-29.2%

New Zealand

• Momentum from 1H sales growth stalled by COVID-19 Level 4 restrictions especially in Q4
• March sales reduced (impacted Q3) as trade reduced purchases in the lead up to lock down

H1

Q3

Q4

H2

International

9.1%

6.6%

‒ United Kingdom sales up 9% in Q3 prior to COVID-19 restrictions which impacted Q4 revenue

‒ Despite impact of lockdown in Q3 Asia sales were up 6% for FY20 vs FY19

-20.5%

-46.5%

6

Overview		Financial results		Strategic progress		Outlook		Appendix

Good 2H momentum in three of our top five customers

GWA sales in top 51 customers (Australia) - revenue vs pcp (pro forma)

Customer A

Customer B

H1

Q3

Q4

H2

H1

Q3

Q4

H2

7.3%

2.9%

5.0%

4.5%

0.8%

	-2.1%
-7.8%	-10.1%

Customer C

H1	Q3	Q4	H2
	14.9%	12.8%	13.8%
-10.3%

Customer D

H1	Q3	Q4	H2
-5.5%
		-31.4%	-33.6%
	-37.8%

Customer E

H1	Q3	Q4	H2
	-8.9%
-33.5%			-37.3%
		-50.6%

7	1	Customers are shown in random order and notation A - E does not denote the size of
		the customer

Overview		Financial results		Strategic progress		Outlook		Appendix

GWA maintains share in challenging market

Market Data¹

Market Segment	FY20 vs FY19
C hange vs prio r co rrespo nding perio d
Residential detached housing	-20%
Multi-Residential	-18%
Commercial (new build)	-4%
Rennovation & Replacement	-8%
(commercial and residential)
Total addressable market	-10%

Market share maintained on a sales-out basis2

‒	Despite challenging market GWA Australia has held
	market share on a sales-out basis²
‒	Demonstrates GWA's commitment to maintain
	profitable share irrespective of market conditions
‒	Continued deterioration in trading conditions in 2H
	FY20 across residential sector (detached and multi-
	residential housing)
‒	Commercial market activity (new build / R&R) has
	slowed however GWA continues to be well placed in
	this sector with a focus on aged / health care and a

%

20.3

19.7

23.423.4

20.8

	growing order bank
‒	Residential renovation & replacement market less
	volatile than the new housing segment
‒	GWA overall market share includes Methven for FY19
	and FY20

Jun 16

Jun 17

Jun 18

Jun 19

Jun 20

8

¹ Source: BIS Oxford Economics and GWA estimates Australia market (value)

² GWA Australia revenue on a 'sales out' basis (i.e. adjusted for merchant destocking)

02 Financial results

9

Overview

Financial results

Strategic progress

Outlook

Appendix

Operational discipline helps mitigate revenue decline

Normalised¹ from continuing operations² (pro forma) includes Methven in FY20 and full yearFY19

Normalised¹ Continuing Operations EBIT Bridge (A$M)

FY19 Methven

pro forma

	85		(27.6)
		6.8
	75				18.5
A$M	65	77.1	4.0	(7.0)	71.8
	55

45

35

FY19

Volume/Mix

Price

FX

Cost changes

FY20

• Volume/Mix: impacted by market decline, COVID-19 and merchant destocking in the Australian market
• Price: Price increase implemented in November 2019 to partially mitigate FX headwinds
• FX: Significantly weaker AUD on product purchases mostly mitigated through forward contracts
• Net cost changes: continued strong operational discipline has mitigated a significant amount of revenue decline

¹ Normalised is before $(1.0)m in significant items (after tax) relating to integration costs associated

10with the acquisition of Methven (FY19: $(7.6)m)

² Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018

Overview

Financial results

Strategic progress

Outlook

Appendix

Operational discipline helps mitigate revenue decline

Normalised¹ from continuing operations² (pro forma) includes Methven in FY20 and full yearFY19

Normalised¹ Continuing Operations EBIT Bridge (A$M)

FY19 Methven
pro forma	Initiatives mitigate $18.5m in
(11.1)
market revenue decline
85

80 6.8

	75		(7.9)		3.0
				5.0
	70
			(8.6)
A$M
65			10.5
	60	77.1		(3.0)
	55			71.8

50

45

40

FY19	Market	Destocking COVID-19	Price/FX Short-term	Cost out	MVN	FY20
	decline	impact⁴	cost	program	Synergies
			reductions

• Revenue down 12% reflects residential market decline / impact of destocking in 1H FY20 and COVID-19 restrictions in 2H FY20 (United Kingdom, New Zealand and China)
• Due to market uncertainty, anticipated uplift in revenue normally experienced as some customers pursue year end incentives did not eventuate in June 2020
• Continued strong operational discipline mitigates significant impact of top line decline. $18.5m savings from "Controlling the controllables":
• • $5.0m relating to $9-12m cost out programme;
  • $3.0m Methven integration savings;
  • $10.5m due to short-term cost reductions
    ‒ STI/SIP3, T&E, Consultancy, Vacancies, A&P
  • EBIT margin 18.0% vs 18.5% in prior year

¹ Normalised is before $(1.0)m in significant items (after tax) relating to integration costs associated

11		with the acquisition of Methven (FY19: $(7.6)m)
² Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018
	3	STI, Short Term Incentives; SIP, Sales Incentive Programme
	4	COVID-19 impact net of $1.0m government grants

Overview		Financial results		Strategic progress		Outlook		Appendix

Operational discipline to manage weak markets

Normalised¹ from continuing operations² (pro forma) includes Methven in full yearFY19

			Pro Forma
	A$m Normalised¹	FY19	FY20	% Change
	Includ es M et hven	Includ es M et hven
		f o r f ull year	f o r f ull year
	Revenue	453.8	398.7	-12.1%
	EBITDA	102.2	92.2	-9.8%
	EBIT	83.9	71.8	-14.3%
	NPAT	53.8	44.9	-16.5%
	EBIT Margin %	18.5%	18.0%	-0.5pp
	ROFE %	21.8%	16.4%	-5.3pp
	EPS	20.4c	17.0c	-3.4c
	Full year dividend (fully franked)	18.5c	11.5c	-7.0c

• Revenue reflects the decline in residential new build and renovation construction activity in Australia coupled with merchant destocking and the COVID-19 impact
• Net profit after tax down (16.5)% on prior year primarily due to increased interest costs on debt related to the Methven acquisition
• Effective tax rate 28.8%
• ROFE decline reflects a combination of lower earnings and increased goodwill related to the acquisition of Methven but exceeds GWA's cost of capital

¹ Normalised is before $(1.0)m in significant items (after tax) relating to integration costs associated

12with the acquisition of Methven (FY19: $(7.6)m)

² Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018

Overview		Financial results		Strategic progress		Outlook		Appendix

Normalised from continuing operations - revenue up 4.4%

Normalised¹ from continuing operations² includes Methven from 10 April in FY19

	A$m Normalised¹	FY19	FY20	% Change
	Includ es M et hven	Includ es M et hven
		f ro m 10 A p ril	f o r f ull year
	Revenue	381.7	398.7	4.4%
	EBITDA	93.0	92.2	-0.8%
	EBIT	78.1	71.8	-8.0%
	NPAT	50.8	44.9	-11.6%
	EBIT Margin %	20.5%	18.0%	-2.4pp
	ROFE %	23.6%	16.4%	-7.2pp
	EPS	19.3c	17.0c	-2.2c
	Full year dividend (fully franked)	18.5c	11.5c	-7.0c

• Revenue growth of 4.4% due to the inclusion of Methven offset by decline in residential new build and renovation construction activity in Australia
• EBIT margin includes the impacts of lower margin Methven business and COVID-19
• Ongoing robust financial position:
• • Board has determined final dividend of 3.5 cents per share. FY dividend 11.5 cents fully-franked
  • DRP implemented at 1.5% discount3 for final FY20 dividend

13		¹ Normalised is before $(1.0)m in significant items (after tax) relating to integration costs associated
		with the acquisition of Methven (FY19: $(7.6)m)
		² Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018
	3	1.5% discount to the volume weighted average market price (VWAP)

Overview

Strong cash conversion maintained

		Pro Forma
	Cash flow from Continuing	FY19	FY20
	Operations A$M	Includ es M et hven	Includ es M et hven
	f o r f ull year	f o r f ull year
	EBITDA	102.2	92.2
	Net movement in Working Capital	7.0	(0.6)
	Other	(1.5)	(3.0)
	Cash Flow from Operations	107.7	88.6
	Capital Expenditure	(8.1)	(12.3)
	Restructuring / Other costs	(12.8)	(1.8)
	Net Interest Paid	(6.5)	(8.0)
	Tax Paid	(27.1)	(17.8)
	Lease Payments	(11.0)	(8.4)
	Free Cash Flow	42.3	40.3
	Discontinued Operations	98.9	(0.0)
	Group Free Cash Flow	141.1	40.3

Financial results		Strategic progress		Outlook		Appendix

• Continued focus on strong cash management
• Cash conversion from operations remains strong at 96% despite weaker markets / COVID-19
• Strong focus on debtor management with DSO in line with prior year
• Capital expenditure at the low end of the range at $12.3m, focused on initiatives to drive cost efficiencies and revenue enhancing opportunities:
• • Caroma Smart Command®
  • Warehouse and office consolidation
  • IT investment
• FY20 cash restructuring / other costs relate primarily to Methven integration costs

14	¹ Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018
	² Cash Flow from Operations divided by normalised EBITDA

Overview		Financial results		Strategic progress		Outlook		Appendix

Strong financial position maintained despite COVID-19

	Metrics1	30 June	30 June	30 June	30 June	30 June
	2016	2017	2018	2019	2020
	Net Debt	88.4	79.8	97.7	141.9	144.8
	Leverage Ratio
	Net Debt / EBITDA	1.1	0.9	1.1	1.6	1.9
	Interest Cover
	EBITDA / Net Interest	14.3	17.1	19.6	23.5	13.6
	Gearing
	Net Debt / (Net Debt + Equity)	22.3%	19.9%	22.7%	27.5%	28.4%
	Net Debt
	Borrowings	120.0	112.0	125.0	177.8	175.4
	Bank Guarantees	4.1	4.1	1.8	3.8	1.8
	Cash	(35.7)	(36.4)	(27.9)	(39.6)	(32.4)
	Held for sale cash	-	-	(1.2)	-	-
		88.4	79.8	97.7	141.9	144.8

• GWA remains in a strong financial position to operate through current challenging environment
• Net debt of $144.8m broadly in line with prior year due to continued focus on cash management
• • FY19 net debt increase includes Methven acquisition
• Credit metrics remain strong with Leverage ratio at 1.9 times
• Substantial headroom maintained within $283m banking facility
• • $33m facility increase in April 2020
  • $243m multi-currency revolving facility does not expire until October 2022; $40m revolving bi-lateral matures October 2020

• Metrics calculated as required for reporting to GWA's syndicated banking group and have not

15	been adjusted for the impact of IFRS 16 Leases. Leverage Ratio is calculated using twelve
months pro forma Methven results and Interest Cover is calculated using Methven results from
	the acquisition date (10 April 2019)

03 Strategic progress

16

Overview		Financial results		Strategic progress		Outlook		Appendix

GWA evolving strategy for growth

PURPOSE: We make life better through products, services and technologies that create superior solutions for people to enjoy and

sustain water, our planets' most precious resource.

GOAL: We use our fixtures, insights and expertise to save a Sydney Harbour of water (500GL) every year.

Strategic

Growth

Drivers

Enabling

Capabilities

Key

Deliverables

Cultural

Pillars

17

Build		Extend		Leadership of water smart,		Grow select overseas markets
R&R		ANZ leadership position in		connected bathrooms and		leveraging ANZ Commercial
market share		Commercial segment		buildings		expertise
in ANZ

INNOVATE and PARTNER: solutions, services and ways of doing business.

EXCEED CUSTOMER SERVICE EXPECTATIONS: good to do business with - people, processes, systems.

DRIVE BEST COST: Continuous improvement to support profitability and fund selective reinvestment.

ATTRACT and DEVELOP GREAT PEOPLE: Continue to build capability, culture and engagement.

GWA Operational Measures : Safety, Market share, NSV, EBIT, DIFOT, NPS, Engagement

External Measures of Success : NPAT growth, ROFE, TSR, Water sustainability

WE ALL LEAD. WE ARE CUSTOMER FOCUSED AND CONSUMER DRIVEN. WE CARE FOR EACH OTHER.

Overview		Financial results		Strategic progress		Outlook		Appendix

Continued focus on superior solutions for water

FY21

A strong resilient business

Australia

• Extend Australian share leadership by shifting investment to "winning" brands
• Drive digital engagement

• Extend commercial	Caroma
leadership	&
	Methven

New Zealand

• Extend market leadership leveraging the integrated business
• Extend tap and showerware Centre of Excellence for the group

Asia

• Strengthen GWA foothold in key growth region
• Develop superior local customer understanding and innovation
• Simplify our footprint, segment focus and supply network

United Kingdom

• Leverage local agility to drive profitable share growth
• Drive Methven share of business
• Lay the ground work for Caroma entry including Caroma Smart Command®

18

Overview		Financial results		Strategic progress		Outlook		Appendix

Building R&R market share in ANZ

Consumer engagement

‒ Increased upfront engagement with Caroma website traffic increasing by 23% in 2H FY20

‒ Combined monthly social media reach of ~800k hits

New product launches

‒ Caroma Elvire premium range

‒ Methven Tūroa coloured tapware ‒ Nefa II and Fast Flow II valves

‒ New shower and tapware ranges in both the UK and Asia

Omni channel experience

‒ Media across outdoor, online and TVC¹

‒ Continued momentum in Flagship Stores despite COVID-19 closures with shift to live streaming of events

19	¹ Television commercials

Overview		Financial results		Strategic progress		Outlook		Appendix

Extend ANZ leadership position in Commercial segment

‒ Commercial forward order book remains strong at 16% ahead of the corresponding period last year, through:

‒ Strong traction in Aged Care

‒ Share growth in the declining Multi-res segment ‒ Extending Office footprint

‒ Leverage strength in sanitaryware to attach tapware in key projects

‒ Acceleration of Caroma Smart Command® installations and order book

‒ Methven integration has strengthened GWA's offer with broader tapware portfolio, leading to increased basket ordering

‒ Continuing to develop and drive new opportunities in Commercial replacements

‒ Launch product innovation to improve speed and efficiency for installers / plumbers

20

Overview		Financial results		Strategic progress		Outlook		Appendix

Strong market support for Caroma Smart Command®

Progress

• Strong customer engagement in multiple commercial segments not only surrounding the system's water saving technology but also its enhanced hygiene and touchless applications
• Caroma Smart Command® (CSC) installed in 49 sites across Australia and New Zealand. Roll-out into other sites during the second half of FY20 was delayed by COVID-19 however there remains a solid bank of additional projects in the pipeline for FY21
• 23 sites migrated to the cloud solution with further migrations planned for FY21, creating a platform for service solution
• Intelligent Shower and Eco Valve launched in Q4 FY20 with a number of installs already underway
• Strong NPD1 pipeline into FY21 with a number of product, technology and cloud interface enhancements in development
• Leveraging Methven geographic footprint for international expansion
• First Asian CSC install underway - water scarcity is a major global issue
• Naming rights sponsor of the Australian pavilion at Dubai World Expo (October 2021) will open up global exposure

21	¹ New product development

Overview		Financial results		Strategic progress		Outlook		Appendix

Continued progress on Methven integration opening up overseas growth opportunities

7%

1%

79%

13%

22	= % of GWA Revenue
¹ New product development

• Integrated sales structure now implemented and providing improved ranging of Methven products in the Australian merchant channel
• Consolidation of distribution network to four key distribution centres in NSW, QLD, VIC and WA, enabling us to:
• • Integrate Methven products into GWA systems
  • Enhance customer service through single invoice and single order delivery
• Tap and showerware Centre of Excellence in New Zealand is building a strong pipeline of NPD1
• • Methven shower IP to be used in Caroma new shower launches taking place in FY21
• Methven has provided enhanced geographic diversification, which continues to be a strategic growth opportunity for the Group
• • International markets are leveraging Caroma product to go to market with a whole bathroom solution
• Cost synergies ahead of target with A$3m in FY20; expect at least A$6m by FY21 (revised from original NZ$5m on acquisition)

04 Summary and outlook

23

FY21 outlook¹

Key area

Market Activity

Overview		Financial results		Strategic progress		Outlook		Appendix

FY21 commentary

• Trading in July 2020 is slightly ahead of pcp. However, trading is expected to remain very challenging in FY21 due to weak construction market conditions further exacerbated by uncertainty surrounding the effects of COVID-19 across all regions and as highlighted by the rapidly evolving situation in Victoria.
• Lead indicators point to a reduction in GWA's addressable market for FY21, driven predominantly by the residential new build segment; with the decline in residential R&R segment expected to be less pronounced
• While Commercial R&R / new build activity is expected to moderate, GWA's forward order book remains solid and higher than the corresponding period last year
• Timing and extent of any potential benefit from government stimulus measures is uncertain

Drive revenue opportunities to continue above market growth

Maintain cost discipline and continue to invest for medium term growth

• FY21 focus on customer and consumer initiatives to generate share growth
• • Agreed business plans with customers targeting specific product / segment categories
  • Leverage new total bathroom ranges in Caroma and Methven tap and showerware launches to further build consumer engagement
  • Drive further growth of Caroma Smart Command® in Australia, New Zealand and Asia
• Deliver year 3 of $9-12m cost out programme for margin management / re-investment in revenue growth initiatives
• Expect $6m Methven integration savings by FY21
• 70% of FY20 US$ requirements hedged at US$0.67c enables forward visibility / planning
• Next update at AGM 30 October 2020

24	¹ Refer to page 27 for FY21 assumptions

Superior Solutions for Water

Results Presentation

Year ended 30 June 2020

17 August 2020

05 Appendix

26

			Overview	Financial results	Strategic progress	Outlook	Appendix
FY21 Key Assumptions1
		Area	Assumption
		Australian market backdrop	BIS total building activity data2 is indicating a (7)% market decline in FY21
		Customer stock on hand	Not expecting any significant customer de/restocking in FY21
		Price increase	Effectively ~5% to be implemented from August across Australia / New Zealand
		D&A (depreciation and amortisation)	Expected to be ~$8-9m excluding the impact of IFRS 16. Including the impact of IFRS 16 D&A is
			expected to be ~$20-21m. (refer slide 28 for reconciliation)
		Interest costs	Expected to be ~$5-6m excluding lease interest. Including the impact of IFRS 16 interest costs
			are expected to be ~$8-9m. (refer slide 28 for reconciliation)
		FX	~$8-9mon-costs driven by a weaker ~5c AUD:USD
		Tax rate	~29-30% on a continuing normalised business
		Working capital	To remain broadly similar to FY20
		Capex	~$12-14m due to: investment in Technology, Caroma Smart Command®, NPD and cost out
			initiatives
		$9-12m cost out by FY21	~$4m savings in FY21
		Methven Integration savings	~$3m savings in FY21
		FY20 short-term cost reductions	~$9.5m is assumed non-repeatable and crucial to delivering GWA's strategic agenda
		Significant items	Expected ~$(1-2)m of Methven integration costs
27	1 Refer Disclaimer on slide 2

2 BIS Oxford data, Australia market, June 2020 release

Overview		Financial results		Strategic progress		Outlook		Appendix

IFRS 16 Leases - impact on key metrics

Normalised¹ from continuing operations² (pro forma) includes Methven in full year FY19

			FY19				FY20
	A$m		Includes M ethven				Includes M ethven
Previously	Restated	IFRS 16		Pre IFRS 16	Post IFRS 16	IFRS 16
		disclosed		Adjustment		Adjustment	Adjustment	Adjustment
	Revenue	453.8	453.8	0.0		398.7	398.7	0.0
	EBIT (Normalised²)	82.9	83.9	1.0		70.3	71.8	1.6
	EBIT Margin %	18.3%	18.5%	0.2pcp		17.6%	18.0%	0.4pcp
	Depreciation & amortisation	7.1	18.4	11.2		7.4	20.4	13.0
	EBITDA (Normalised²)	90.0	102.2	12.2		77.7	92.2	14.5
	Net Interest expense	4.8	7.1	2.3		6.0	8.6	2.7
	NPAT	94.2	93.3	(0.9)		44.7	43.9	(0.8)
	NPAT (Normalised²)	54.7	53.8	(0.9)		45.7	44.9	(0.8)
	Operating Cash Flow	95.5	107.7	12.2		74.0	88.6	14.5
	ROFE %	21.5%	21.8%	0.3pcp		16.1%	16.4%	0.4pcp

¹ Continuing Operations excludes the Door & Access Systems' business which was sold on 3 July 2018

28² Normalised is before $(1.0)m in significant items (after tax) relating to integration costs associated with the acquisition of Methven (FY19: $(7.6)m)

Overview		Financial results		Strategic progress		Outlook		Appendix

Reconciliation - Reported NPAT to Normalised¹ NPAT

		FY19			FY20
A$m	Continuing	Discont'd	Group	Continuing	Discont'd	Group
	Operations²	Operations	Total³	Operations²	Operations	Total³
Normalised¹
REVENUE	381.7	0.0	381.7	398.7	0.0	398.7
EBITDA	93.0	0.0	93.0	92.2	0.0	92.2
EBIT	78.1	0.0	78.1	71.8	0.0	71.8
NPAT	50.8	0.0	50.8	44.9	0.0	44.9
EPS (cents)	19.3	0.0	19.3	17.0	0.0	17.0
Significant Items
Pre Tax	(8.8)	50.1	41.3	(1.5)	0.0	(1.5)
Post Tax	(7.6)	50.8	43.2	(1.0)	0.0	(1.0)
Reported
REVENUE	381.7	0.0	381.7	398.7	0.0	398.7
EBITDA	84.3	50.1	134.4	90.7	0.0	90.7
EBIT	69.3	50.1	119.4	70.3	0.0	70.3
NPAT	43.2	50.8	94.0	43.9	0.0	43.9
EPS (cents)	16.4	19.3	35.6	16.6	0.0	16.6

• Normalised is before Significant items. Significant items relate to profit on sale of the Door & Access Systems business and the transaction and integration costs associated with the acquisition of Methven
  ² Continuing operations exclude the Door & Access Systems' business which was sold on 3 July 2018
  ³ Group Normalised NPAT, Reported EBIT and Reported NPAT will not, in all cases, add across the page due to rounding. The Group results are consistent with the 4E and Financial Report

29

Overview

Financial results

Strategic progress

Outlook

Appendix

Increased presence in R&R segment and improved geographic diversification provide resilience through the cycle

		Segment			Category
				Resi	Basins, Sinks,	Valves 1%
				18%	Tubs & Baths
					19%
		Resi					Sanitaryware
		R&R		Multi-Resi
				10%		44%
		R&R
	59%	Comm		Taps &
			R&R1	Commercial
				13%	Showers
					36%
		Geography			Brand
		United Kingdom Asia		Other
	7%	1%		18%
		New Zealand
	13%			Dorf
					3%
					Methven
					12%		Caroma
						60%
					Clark
				Australia	7%
				79%
30		¹ Commercial R&R in Australia only

Overview		Financial results		Strategic progress		Outlook		Appendix

Existing housing turnover has declined significantly in FY20

	70
	60
	50
per month	40
30
'000s
20
	10
	0
	95	96	97	98	99	00	01	02	03	04	05	06	07	08	09	10	11	12	13	14	15	16	17	18	19	20
				Number of dwelling sales, Australia					Trend (Number of dwelling sales, Australia)

31	Source: ANZ, data to April 2020

Overview		Financial results		Strategic progress		Outlook		Appendix

Number of loans for construction and purchase of new dwellings

Number of loans, per month

8,500

8,000

7,500

7,000

6,500

6,000

5,500

5,000

32	Source: ABS

Overview		Financial results		Strategic progress		Outlook		Appendix

Annual net overseas migration & Australian population growth

33

Annual net overseas migration & Australian population growth

350	2.5
300
	2.0
250
200	1.5
150	1.0
100
	0.5
50
0	0.0

Annual net overseas migration ('000s)		Australian population growth (%)	Linear (Annual net overseas migration ('000s))

Source: ABS

Superior Solutions for Water

Results Presentation

Year ended 30 June 2020

17 August 2020