REECE LIMITED — AGM Information 2019

Oct 29, 2019

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AGM 2019

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Disclaimer

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Reece AGM - 2019

Chairman’s Address

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Mr Alan Wilson

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Reece AGM - 2019

CEO & MD’s Address

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Mr Peter Wilson

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Reece AGM - 2019

Agenda Our Strategic Approach Financial Performance Business Highlights FY20 Preview

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Reece AGM - 2019

Agenda

Our Strategic Approach

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Reece AGM - 2019

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It all starts with our Purpose & Values

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Reece AGM - 2019

Our vision United States

Australia & New Zealand

Reece AGM - 2019

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FY19 – a year of transition

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Reece AGM - 2019

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Our inherent commitment stays the same

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Reece AGM - 2019

Agenda

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Financial Performance

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Reece AGM - 2019

Sales Revenue

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FY19 $5,464m FY18 $2,689m

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•
Record sales result
•
Acquisitions in the
US & NZ
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% 103

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Reece AGM - 2019

Normalised EBITDA FY19 $522m FY18 $378m • Solid performance in Australia with a slowing market

• MORSCO results in line with expectations

• • Continuing to invest in people & technology

% 38

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Reece AGM - 2019

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Statutory NPAT

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FY19 $202m FY18 $225m % 10

• Normalised NPAT up 6%

• Impact of one off acquisition costs and fair value inventory unwind • ANZ moderated in the second half

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Reece AGM - 2019

Segment Performance

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• Record ANZ result, sales revenue up 6.6%

• MORSCO performing in line with expectations

• The business mix has impacted on EBITDA margins

• New housing approvals have slowed in Australia

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Sales Normalised
Revenue EBITDA
ANZ USA TOTAL ANZ USA TOTAL
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Reece AGM - 2019

Agenda

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Business Highlights

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Reece AGM - 2019

US Growth Platform

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Market Leading Customer Experience

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Innovating for Investing in the Future our People

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Reece AGM - 2019

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Reece AGM - 2019

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Strategy & Vision

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Reece AGM - 2019

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Laying the foundations for the long term

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Reece AGM - 2019

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US
Branches
+4
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Reece AGM - 2019

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Growing in Southern California

California locations Total

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Reece AGM - 2019

US Growth Platform

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Market Leading Customer Experience

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Innovating for the Future

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Investing in our People

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Reece AGM - 2019

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Product Innovation

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GROHE

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Thermann

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EvoPEX Kaden

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Reece AGM - 2019

Digitising the customer experience %

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Reece AGM - 2019

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Australian
Branches
10
121
52
44
180
179
36
15
+5
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Reece AGM - 2019

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NZ
Expansion
A truly national
footprint
+14
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Reece AGM - 2019

US Growth Platform

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Market Leading Customer Experience

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Innovating for Investing in the Future our People

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Reece AGM - 2019

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NEXT & Superseed

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Reece AGM - 2019

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NEXT – innovation toolkit

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Reece AGM - 2019

Continuous Improvement

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Reece AGM - 2019

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Reece AGM - 2019

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Reece AGM - 2019

US Growth Platform

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Market Leading Customer Experience

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Innovating for Investing in the Future our People

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Reece AGM - 2019

Future Leaders

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Reece AGM - 2019

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Reece AGM - 2019

Responsibility

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Reece AGM - 2019

Agenda FY20 Preview

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Reece AGM - 2019

ANZ Building Commentary

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Dwelling Approvals Dwelling Completions
A slower Australian
(000s) (000s)
economy underlining the
importance of diversification
239
231 232
222
219 218
213
202
200
192 192
187
177
168
165
161 162
154
150 151
148
146
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
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Source: BIS Oxford Economics

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Reece AGM - 2019

ANZ Alterations Commentary

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Alterations and Additions
($ million)
A slower Australian
economy underlining the
importance of
diversification
8,116
7,918
7,845
7,787 7,797
7,543 7,519 7,517
7,475
7,332
7,215
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Source: BIS Oxford Economics
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Reece AGM - 2019

ANZ Non-Residential Commentary

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A slower Australian economy underlining the importance of diversification

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Non-residential Commencements
($ million)
45,972
44,891
43,818
41,991
40,101
37,890 37,760
36,151
35,194
33,600
31,219
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Source: BIS Oxford Economics
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Reece AGM - 2019

US Residential Commentary

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Single and multi-family housing starts Leading Indicator of remodeling activity
(‘000’s) - Q1 2019
336 6.9% 7.3% 7.3% 7.0% 6.9% 6.9%
6.4% 6.3% 6.0% 6.1% 6.5%
5.2%
2.6%
1,465
352 353
345 347
309 336 339
330
380 380 313 316 323
374 370 307
302
354 297
392
1,046
355
283 307 906 917
873 875
849
245 782
648
622 178 619
114
112
536
471
442 434
2017-1 2 3 4 2018-1 2 3 4 2019 - 1 2 3 4 2020-1
2006A 2007A 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017 2018 2019E 2020E
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Source: National Association of Realtors Mortgage Bankers Association, Fannie Mae, National Association of Home Builders as of December 2018, John Burns Consulting as of June 2019

Source: Joint Center for Housing Studies of Harvard University, LIRA and U>S> Census Bureau as of May 2019

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Reece AGM - 2019

US Non-Residential Commentary

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Non-Residential Building Construction Expenditure Water Supply Construction Expenditure
($bn) ($bn)
536
530
511
489
480
17
446 16 16 16 16
15 15
392 14 14 14 14
13
13
13 13
360
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 2020E
2013 2014 2015 2016 2017 2018 2019E 2020E
Source: FMI as of Q2 2019
Source: FMI as of Q2 2019
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Source: FMI as of Q2 2019 Note Includes both private and public expenditures

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Reece AGM - 2019

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Q&A
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Reece AGM - 2019