Presentation Morgans Conference 13 October 2017 Disclaimer This - PowerPoint PPT Presentation

Investor Presentation Morgans Conference 13 October 2017

Disclaimer This presentation contains non-IFRS financial measures to assist users to assess the underlying financial performance of the Group. The non-IFRS financial measures in this presentation were not the subject of a review or audit by KPMG. Page 2

Agenda About GWA Summary of Group Strategy Progress on Group Strategy Summary Page 3

About GWA Page 4

Strongly re-positioned for growth From GWA today Diverse Building Products business spread across Clear focus on two segments with strong market numerous segments (Dux, Brivis, Gliderol exited) positions and market leading brands in $2bn category Strong ability to manage through the cycle  Over 50% exposure to ~$900m Renovations and Replacement segment – (less cyclical segment) Diverse business leveraged to building cycle  Business efficiency program in place – ahead of target to remove ~$13-15m in cost savings by FY19 to provide investment and margin resilience Focus on local product manufacturing Focus on customer and consumer markets Collaborative partnerships with exclusive suppliers Net Debt $176 million (June 2012) Net Debt $80m (30 June 2017) Capital investment required for manufacturing Credit metrics in line with investment grade operations Low capital requirements enhances cash conversion Page 5

Focused business with strong market position GWA is a leading designer and supplier of branded building fixtures to households and commercial buildings Our business Our Core Brands Our strengths  Leading designer and supplier  Significant scale across key of branded building fixtures segments of building sector focused on Bathrooms & Kitchens and Door & Access  Enviable reputation within building Systems sector for product quality, technical expertise and superior service  Owner and distributor of market leading brands in core  Cost efficient long term supply categories in over $2 billion agreements with selected, exclusive addressable market manufacturing partners  New management team with  Experienced senior management strong background in consumer team in R&D, design, brand markets building/customer engagement, supply and distribution  Listed on ASX; ~A$700 million market capitalisation Page 6

Operating model meets local needs with global scale Our Value Creating Operating Model Manu- Customer Consumer Product Solution Distribution insights Design facturing Expertise Service Local design Collaborative, Extensive Research drives Ability to add Market-leading team deliver exclusive coverage of consumer and value to product support contemporary relationships merchant market insights customers Commitment to Australian styles with specialist channel through: after sales expertise in Service  Local R&D National service (66 FTEs R&D, quality solutions ensures Distribution in team fielding assurance, Product and  products excel Centre network 2,200 calls per innovation, category and exceed day) Significant scale design, vitreous knowledge Australian and expert china, plastics, Quality  standards salesforce production, taps products easy ~500 patents & locksmithing to install ~1,100 and 1,000 deliveries per 17 GWA people registered day in China to designs support maintain IP protection standards Page 7

Strong and growing Continuing Operations FY17 Revenue by Division (A$m) FY17 EBIT by Division (A$m)* 6.3 96 350 87.6 Bathrooms & Kitchens Door & Access Bathrooms & Kitchens Door & Access Group Revenue (A$m) Group EBIT (A$m) 460 90 446 80.6 78.3 440 72.8 440 75 426 64.5 55 60 420 399 45 400 30 376 380 15 360 0 340 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Page 8 * Note: Excludes Corporate. Continuing Operations excluding Brivis Climate Systems, Dux Hot Water and Gliderol Garage Doors divested in FY15/FY16.

Strong financial position supports growth through the cycle 30 June 30 June 30 June  GWA remains in strong financial position - credit metrics Metric 2015 2016 2017 continue to be consistent with investment grade Net Debt 94.8 88.4 79.8  Net debt $80m – reflects strong cash generation Leverage Ratio Net Debt / EBITDA 1.1 1.1 0.9  Substantial headroom within $225m syndicated banking facility Interest Cover maturing October 2019 EBITDA / Net Interest 12.8 14.3 17.1  $113m in undrawn facilities Gearing Net Debt / (Net Debt + 24% 22% 20% Equity)  Provides enhanced financial flexibility to invest in strategic growth initiatives through the cycle Page 9 Source: GWA.

Margin resilience through the cycle EBIT (A$m) and margin (%)  GWA focused on maintaining margin resilience through the cycle: 90 20 18.1 17.8 17.1 18 80 16.1 80.6 14.6 78.3 16 70  ~50% exposure to Renovations and Replacement 72.8 14 market - less cyclical than new build market 60 64.5 12 50 55 10 40  Market share initiatives to grow presence in key 8 30 end markets 6 20 4 10 2  Reduced cost base through SG&A and Supply Chain 0 0 initiatives FY13 FY14 FY15 FY16 FY17 EBIT EBIT Margin % (RHS)  Lower fixed vs variable cost base from exit of manufacturing  Low capex requirements and strong balance sheet enables continued strong cashflow generation Page 10

Strong presence in R&R; low exposure to Multi-res B&K revenue by end market (%) D&A revenue by end market (%) Commercial Residential 23% 22% Multi-Res 3% Multi- Residential 11% Renovation & Replacement Residential Renovation & Commercial 52% 53% Replacement 15% 21% Page 11 Source: GWA estimates

Summary of Group Strategy Page 12

Strategy – transformation from push to pull To Pull From Push Past: Manufacturing Driven Current: Customer focused Future: Customer and consumer centric Page 13

Our strategy on a page Our Mission: To build GWA as the most trusted and respected company in the building sector Our Purpose: MAKING LIFE BETTER ……. with simple, superior water solutions with a superior range of access and security systems Bathrooms & Kitchens Door & Access Systems GWA Operational Measures Market share, NSV, EBIT, ROFE, DIFOT, NPS, Safety, Engagement Add value to Build an Drive cost out in Leverage and customers advantaged SG&A and build on core Build “fit for through Supply Chain to Supply Chain to Corporate assets & brands future” culture, Priorities improved deliver superior improve to drive revenue engagement and insights, NPD, Quality profitability and and market capability analytics and and Service at allow selective share growth processes best cost reinvestment Maximise Shareholder Value Creation Key Financial Measures – NPAT Growth, TSR, ROFE Page 14

GWA continuing to grow revenue ahead of the market Focus on building profitable market share in core segments drives top line growth ahead of the market 1 2 GWA end market exposure Market activity FY17 Renovation & Overall market remains relatively flat Replacement Change (0.2)% (MAT) Residential Strong pipeline remains from lag between Residential detached house approvals and completions 22% completions Decreased by 5.9% in FY17 (MAT) Multi-Residential Activity increased completions Increased by 29.3% in FY17 (MAT) Multi-Residential 11% Renovation & Commercial Increase in aged care, offset by reduced Replacement activity in health care 52% Decreased by 2.8% (MAT) Commercial 15% Weighted average of end markets up 1.3% 1. Source: GWA estimates Page 15 2. Source: BIS Shrapnel, GWA estimates Australia market B&K only (FY17 MAT)

Renovation & Replacement segment remains stable Renovation Activity (A$bn) Sources: ABS, ANZ Research Page 16

..and expected to remain so as housing turnover below peak Housing sales (‘000s) Sources: ABS, ANZ Research Page 17

Progress on Group Strategy Page 18

Continued progress on strategy Strategic priority Progress against priorities  Growing share consistently in core segments  Strong new product and breakthrough innovation pipeline in FY18 Leverage and build on core assets & brands to  Consumer engagement – concept centres opening (Adelaide and Sydney); digital drive revenue and market share growth presence enhanced  Clear portfolio direction on core brands: Caroma, Clark and Dorf  Joint business plans with major merchants driving agreed targets / initiatives Add value to customers through improved  Specific customer plans for R&R re product ranging, improved showroom presence insights, analytics and processes  Initiatives in place to unlock untapped growth areas – Aged Care, Commercial R&R  Employee alignment on values and behaviours to drive strategy Build “fit for future” culture, engagement and  Employee engagement strategy – Get, Grow, Keep capability  Sales and Marketing capability build implemented  Dual-sourcing progressing for continuity of supply Build an advantaged Supply Chain to deliver  First Asian consolidation hub complete – direct shipping to port superior NPD, Quality and Service at best cost  Integrated Business Planning focused on inventory management to drive working capital improvement  Ahead of target to reduce costs by $13-15m by FY19 Drive cost out in SG&A and Supply Chain to  Corporate costs down a further 2% improve profitability and allow selective reinvestment Page 19