2024
Annual Report
Reliance Worldwide Corporation Limited
Reliance
Worldwide
Corporation
Limited
Chairman and CEO Letter to Shareholders
4
Introducing Holman Industries
10
Holman ECO product range
12
75 Years of Innovation and Global Expansion
14
Manufacturing locations
18
Strategy overview
20
Board Members
22
Senior Leadership Team
23
Operating and Financial Review
24
Financial Statements
Directors’ Report
30
Shareholder Letter
42
Remuneration Report
44
Auditor’s Independence Declaration
68
Consolidated Statement of Profit or Loss
69
and other Comprehensive Income
Consolidated Statement of Financial Position
70
Consolidated Statement of Changes in Equity
71
Consolidated Statement of Cash Flows
72
Notes to the Consolidated Financial Statements
73
Consolidated Entity Disclosure Statement
115
Directors’ Declaration
117
Independent Auditor’s Report
118
Shareholder Information
123
Corporate Directory
125
Contents
Annual Report
2024
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2
Reliance
Worldwide
Corporation
Limited
Dear shareholders,
We are pleased to present the annual report
for the 2024 financial year. This year marks the
75th anniversary of the company’s establishment
in Brisbane in 1949.
A year ago, we noted that the outlook for FY24
rested principally on global economic conditions
which we expected to be challenging. This proved
to be the case, with higher interest rates impacting
housing markets through slowing house price
appreciation or declining house values, lower
turnover of existing houses, reduced consumer
appetite for remodel activity, and lower residential
new construction activity. As a result, volumes were
lower in all of our regions in FY24 compared with
the prior year.
The team at RWC have worked proactively to
minimise the impact of these lower volumes. We
introduced a range of new products in the Americas
which drove an above-market sales performance.
Cost reduction programs in all regions helped to
mitigate the impact of lower volumes and offset
cost inflation, and enabled RWC to achieve stable
operating margins in line with the prior year. And our
focus on working capital management helped to
generate strong operating cash flow. We are proud
of the performance we achieved in FY24 against
challenging market conditions.
Health and Safety
Health and safety remain RWC’s highest priority.
Our focus is on maintaining a safe and healthy
workplace to ensure our people arrive home safely
at the end of every day.
We have made strong progress this year in
executing the multi-year safety improvement
program we launched in FY23. Our focus on
global collaboration, safety leadership, and
identifying and controlling risk has resulted in a
significant reduction in the number of injuries in
our workplaces in FY24. The Recordable Injury
Frequency Rate (RIFR) measures all recorded
lost time injuries plus other injuries requiring
medical treatment, per one million hours worked.
Our score improved from 5.49 in FY23 to 2.62 in
FY24, a reduction of 52%.
Other key achievements in FY24 have included
enhanced safety governance; the implementation
of global safety standards for three critical risks –
mobile plant, drive safely, and height safety; the
introduction of a global risk matrix to determine
priorities; the establishment of a behavioural safety
program; and standardised systems and reporting
across all regions.
Financial Performance
Reported net earnings (NPAT) of $110.1 million was
21% lower than the prior corresponding period
(“pcp”). Adjusting for the one-off costs related
to the closure of the Supply Smart business in
the Americas, restructuring in EMEA and the
impairment of manufacturing assets in Spain,
and costs associated with the acquisition of
Holman, NPAT was down 6% at $146.9 million.
Americas sales were $877.7 million, 1% lower
than pcp. Weaker demand from discretionary
remodel end-markets was largely offset by new
product revenues.
We announced during the year that we would
cease operating the Supply Smart sales model.
Supply Smart sold products direct to plumbers
in the US through an online website and a phone
sales team. This is a different selling model
compared with RWC’s preferred selling model
through distributors. The orderly transition
and sell down of Supply Smart inventory and
closure of this business unit was completed
during the year. Excluding the impact of
the Supply Smart closure, America’s
sales were 0.6% lower than the pcp.
Americas operating earnings were $184.3 million,
16% higher than pcp. A higher operating margin
was partly driven by the transfer of some SharkBite
Max manufacturing and assembly from Australia to
the US, as well as cost reduction initiatives.
Asia Pacific sales of $190.3 million were up 3% in
local currency versus FY23. Sales included $32.1
million from Holman following completion of the
acquisition on 1 March 2024. Excluding Holman,
sales were down 15% in local currency. This was
mainly due to the progressive transfer of some
manufacturing and all assembly of SharkBite Max
fittings to the Americas during the year, with inter-
company sales down 35%. External sales were 3%
lower in local currency, reflecting lower residential
new construction activity in Australia.
Asia Pacific operating earnings for the period were
$22.0 million, 31% lower than pcp, with the shift in
production of SharkBite Max components to the
Americas negatively impacting performance.
Sales in EMEA were $263.6 million, 7% lower
in local currency versus FY23. UK plumbing
and heating sales were down 6% due to lower
volumes in residential remodel and residential new
construction. Continental Europe sales were 11%
lower than pcp with weak economic conditions
adversely impacting demand.
EMEA operating earnings of $77.2 million were
16% lower in local currency and EMEA’s operating
margin also declined.
Overall, we have delivered a group result in line
with our expectations and the guidance we set
at the beginning of the year. Our resilient top line
and careful cost control, coupled with disciplined
working capital management, led to another period
with strong operating cash flow which in turn
enabled us to further strengthen our balance sheet.
Chairman and CEO Letter to Shareholders
Stuart Crosby
Chairman
Asia Pacific sales of $190.3 million
were up 3% in local currency
versus FY23.
We made strong progress this
year in executing the multi-year
safety improvement program
launched in FY23.
Letter to Shareholders
Chairman and CEO
5
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Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Holman Industries
In February, we announced that we would be
acquiring Holman Industries in Australia, and
the acquisition was completed on 1 March. The
purchase price of A$160 million represented a
multiple of seven times EBITDA of A$22.9 million
for the 12 months ended December 2023.
Combining Holman with RWC will double our
external revenues for the Asia Pacific segment.
Holman’s complementary product range
has effectively doubled the size of our target
addressable market in Australia.
There were several strategic drivers for the
acquisition. The primary driver was Holman's range
of “water out” drain, waste and vent products.
Holman have established a strong market position
in this part of the plumbing market. This has been
a part of the market that RWC has been looking
to enter in each of our regions. In residential R&R,
residential new construction, and commercial
construction, water-out and water-in are closely
coupled elements of the same plumbing market.
Adding the Holman product suite to our existing
portfolio in the Australian market will create
significant opportunities. We will be looking to
expand the penetration of Holman plumbing
products across our broader combined
distribution footprint.
The second major driver has been the
diversification of our channel mix in Australia.
Holman has a strong position within retail
distribution in Australia. By comparison, RWC
has been traditionally centred around wholesale
plumbing distribution. Holman has a formidable
reputation for operational excellence in servicing
the retail sector.
We have been really impressed with the culture of
the business and depth of talent in Holman. Since
completing the acquisition, we have successfully
combined the RWC APAC business and Holman
into a single organisation structure and integration
of the two businesses is progressing well.
New product initiatives
Last year we announced the introduction of two
important new product ranges in the Americas,
SharkBite Max and PEX-a pipe and expansion
fittings. We have made excellent progress in rolling
out these new products, which contributed to the
overall result, and particularly in the Americas.
We are particularly proud of our execution of the
SharkBite Max rollout. This has been an immensely
complex and challenging product implementation.
Our people in both the Asia Pacific and Americas
regions really stepped up to deliver this project.
Importantly, the customer reaction has been
tremendous. We have delivered a clearly better,
simpler, faster to install product. And we are also
putting more value on our distributors’ shelves.
The rollout of the full SharkBite Max range has now
been substantially completed.
The rollout of PEX-a pipe and expansion fittings
was another highlight of FY24, with the rollout to
1,800 Lowe’s stores in the US completed, followed
by the roll out of the product to a number of
wholesale channel partners.
In addition to these new product
major product initiatives, we
drove strong growth in the EZ-Flo
gas appliance connector range
and successfully launched new
HoldRite products into the North
American market.
Changes to
Distribution Policy
During the year we completed a review of our
distribution policy settings. The review was
prompted, in part, by the geographical change
in earnings mix. With Australian earnings now
accounting for a lower proportion of total group
earnings, future dividends will generally be either
unfranked or only partly franked.
RWC still intends to distribute between 40% and
60% of annual NPAT. However, following the
review, the form of distribution now comprises
a cash dividend component and an on-market
share buy-back component. This new approach
recognises the desire of some investors to continue
receiving cash dividends, while also implementing
a capital management strategy utilising on-market
share buy-backs that are value accretive for
shareholders. The Board’s intention is that the total
distribution amount for a period will be allocated
approximately 50 per cent to a cash dividend and
50 per cent to on-market share buy-backs.
A final distribution amount of US5.0 cents per share
(US$39.3 million) has been declared, comprising
an unfranked final cash dividend of US2.5 cents per
share and the undertaking of an on-market share
buy-back for US$19.6 million (equivalent in total to
US2.5 cents per share).
Total distributions declared for the year ended
30 June 2024 are US9.5 cents per share totalling
$74.8 million which represents 68% of Reported
NPAT and 51% of Adjusted NPAT.
Chairman and CEO Letter to Shareholders
The rollout of
PEX-a pipe
and expansion
fittings was
another highlight
of FY24.
Heath Sharp
Chief Executive Officer
Letter to Shareholders
Chairman and CEO
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Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Chairman and CEO Letter to Shareholders
9
Cash Flow
We have recorded another year of exceptionally
strong cash flow generation. Cash generated
from operations was $314.2 million, an increase
of 7% on pcp. Operating cash flow conversion for
the year was 114% of Adjusted EBITDA, with the
improvement mainly due to the reduction in net
working capital.
The strength of our cash flow performance is
demonstrated by the fact that we were able to
fund the acquisition of Holman for A$160 million
and also further reduce our overall debt levels.
Net debt at 30 June 2024 was $421.1 million,
down from $435 million at the end of FY23.
Our leverage ratio (net debt to EBITDA) reduced
from 1.69 to 1.59 times. As a result of this strong
cash generation, we are now close to the lower
end of our target leverage range of 1.5 times to
2.5 times net debt to EBITDA.
Sustainability
This year we have published our 2024 ESG Report
concurrently with the release of this Annual Report.
The ESG Report details the significant progress we
have made across a range of environmental, social
and governance areas.
Of particular note has been the reduction in our
Scope 1 and 2 GHG emissions, with a cumulative
reduction of 35% compared to our FY21 baseline.
We exceeded our FY24 target and are on track to
achieve or exceed our goal of a 42% reduction in
Scope 1 and 2 emissions by 2030. We have also
expanded our reporting of Scope 3 emissions and
improved Scope 3 calculations by adding supplier-
specific emission factors. This will ensure we are
aligned with the draft Australian Sustainability
Reporting Standards.
Outlook
We expect that macroeconomic factors will again
be a key driver of company performance in FY25.
Any improvement in demand in FY25 will be
partly dependent on an easing of interest rates in
RWC’s key geographies, particularly in the second
half of FY25.
For the first six months of trading in FY25 we expect
group external sales to be broadly flat, within a
range of up or down by low single digit percentage
points, relative to FY24, excluding the impact of
Holman and Supply Smart. We expect a similar
trajectory in each region. New product and revenue
initiatives in each region are expected to help
mitigate the impact of weaker end-markets. Cost
reduction and efficiency measures will continue to
be pursued and we are targeting an improvement in
consolidated EBITDA margin in the first half of FY25
relative to the pcp. While we cannot determine the
course of economic trends, we remain well placed
with our local manufacturing operations and strong
track record of class-leading customer service
to navigate economic challenges and respond
to customer needs. We expect our ongoing new
product introductions will enable us to continue our
long-standing record of delivering above-market
growth with quality margins.
We look forward to presenting to shareholders at
the annual general meeting to be held in Sydney on
24 October 2024. Full details including the time and
venue will be outlined in the Notice of Meeting.
Stuart Crosby
Chairman
Heath Sharp
Chief Executive Officer
8
Cash generated from
operations was $314.2
million, an increase of
7% on pcp.
Letter to Shareholders
Chairman and CEO
8
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Introducing
Holman Industries
RWC acquired the
Holman Industries
business in Australia
on 1 March 2024.
The acquisition of Holman has expanded RWC’s
product offering and channel partner distribution
reach and will help drive future growth in the
Australian plumbing market. Approximately half
of Holman revenues are generated from sales of
plumbing products focused on drain, waste and
vent (DWV) solutions, stormwater fittings, and
PVC pressure fittings. The remaining revenues are
generated by sales of watering products including a
range of hose systems, fittings, timers, and garden
products in retail and hardware. Holman is a long-
term supplier to this segment with strong retail
fulfilment execution expertise.
Holman PVC plumbing products for DWV solutions
are manufactured at its plants in Western Australia
and Queensland. Other products are sourced
from trusted international suppliers. Holman has
a network of seven distribution centres across
Australia to service its channel partners.
Product innovation coupled with high levels of
customer service have been instrumental in driving
Holman’s growth. This is strongly aligned with RWC’s
approach to growing its business.
The acquisition of Holman provides RWC with
immediate and substantial access to the Australian
water-out segment, allowing us to strengthen our
overall offering and be an even better partner to our
core plumbing wholesalers in Australia. Entering the
DWV market is a strategic priority in each of our three
regions. While we have looked at other opportunities
globally, Holman marks our first foray into this end
market. We expect it will help lead and catalyse our
approach in other markets globally.
Holman also gives RWC significantly expanded
access to the retail channel in Australia. This will
provide us with the opportunity to grow our legacy
RWC products within retail while also putting
more scale and manufacturing capability behind
Holman. We believe Holman’s success is linked to
its genuinely world class execution capabilities into
retail and hardware. This acquisition will allow us to
utilise Holman retail operational capabilities in other
parts of the world, while also enabling us to look for
opportunities to bring our US retail market expertise
to Australia.
Holman is a leading independent manufacturer and
distributor of branded plumbing and watering products
sold through retail and wholesale channels in Australia.
10
Holman Industries
Introducing
10
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Annual Report
2024
Reliance
Worldwide
Corporation
Limited
13
Holman
ECO product
range
In 2022, Holman
launched its ECO
range of products.
The launch was in response to growing consumer demand
for environmentally friendly products, and was driven by
the desire to make products that are more sustainable by
linking them to plastics recycling. The Holman ECO product
family contains a minimum of 70% recycled materials by
weight. All products labelled ‘Holman ECO’ are determined
by the percentage of recycled materials relative to virgin
materials used. Each part of the product is broken down by
the different material inputs, allowing visibility of the total
recycled percentage by material weight. This has provided
the end-user with a high level of confidence around the
extent to which recycled materials have been used. Holman
ECO products made in Australia use recycled household
plastic waste products.
In 2023, Holman took the concept further with the
development of the ECO Watering Can. Designed by the
Holman product team, the product is moulded, packaged
and ready to be delivered to retailers on-site at the Holman
plant in Western Australia. This range is crafted from over
95% recycled plastic, including recycled local council
wheelie bins, making it a great sustainable choice for the
garden. The unique shape and ergonomic handle make it
easy to use and perfect for watering indoor and outdoor
plants. Importantly, the design allows the watering
cans to be stacked one inside the other, making it
much easier to transport. This minimises the volume
required for transportation, another sustainability
benefit. The Holman ECO Watering Can is a
great example of the Holman commitment to
sustainability.
The ECO Watering Can is crafted
from over 95% recycled plastic,
including recycled local council
wheelie bins, making it a great
sustainable choice for the garden.
Holman ECO material breakdown
Recycling of agriculture film used in the manufacture
of the Holman ECO range
ECO product range
Holman
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Reliance
Worldwide
Corporation
Limited
Annual Report
2024
In a journey spanning over seven decades,
RWC commemorates its 75th anniversary in 2024,
marking a legacy of innovation, expansion, and
industry leadership.
75 Years of Innovation
and Global Expansion
Reliance Manufacturing Company Pty Ltd (RMC)
was established in 1949 in Brisbane, Australia.
Driven to make water heating systems safer, cleaner
and less prone to failures, RMC’s first products
included a reengineered pressure reducing valve
and the first low pressure relief valve.
Throughout the following decades, RWC continued
to push the boundaries of innovation, introducing
many industry firsts. In 1953, RMC revolutionised the
industry by combining pressure reducing and relief
valves into a pre-assembled unit. This removed
the need for ventilation pipes and ceiling cistern
tanks, all but eliminating faulty installations and
associated dangers. This was a breakthrough
product to protect homeowners and reduce
installation time and cost.
A new and improved mixing valve for hot and
cold water systems was launched in 1958 making
it quick, easy and cost-effective to install, while
being a stronger and more durable application.
The first pressure-limiting valve followed in 1962
and temperature pressure relief valves in 1968.
By 1976, RMC had entered the European market
and was instrumental in changing the UK from
vented to unvented water heaters.
In 2002, RMC entered the US market with the
acquisition of Cash Acme, the world’s largest
volume temperature and pressure valve
manufacturer. During this period, a number
of innovations were introduced to the US
market: thermostatic mixing valves for safe and
comfortable water temperature, and easy to service
replaceable cartridge pressure reducing valves.
Following its initial success in Australia, RWC was
the first to introduce a full range of push-to-connect
(PTC) fittings, an innovative fittings technology,
to the US plumbing industry in 2004, under the
premium SharkBite brand. Following this, sales
of PTC accessories in the US, such as ball valves,
flexible connector hoses, and service stops, also
grew rapidly. PEX pipe was also introduced into
North America with RWC gaining a top 5 position in
this market segment.
The acquisition of HoldRite in 2017 enabled RWC to
broaden its offering to the commercial construction
market. HoldRite products, including engineered
plumbing support systems, fire stops, water heater
accessories and acoustic pipe isolation solutions are
complementary to RWC’s traditional products.
Another major landmark for RWC came in 2018 with
the UK acquisition of John Guest and its globally
renowned Speedfit brand. Expanding RWC’s
footprint and intellectual property in the UK and
Continental Europe, this strategic move elevated
RWC to the world’s largest manufacturer of brass
and plastic push-to-connect technologies for
plumbing and heating applications, as well as a
diverse range of other industries.
Global Expansion
Innovation and
75 Years of
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Annual Report
2024
Reliance
Worldwide
Corporation
Limited
1949
RMC (Reliance
Manufacturing Company)
is established in Brisbane,
Australia.
2002
RWC enters the US
market with the
acquisition of Cash
Acme, the world’s
largest volume
temperature and
pressure valve
manufacturer.
1953
Launch of the world’s
first packaged unvented
water heating storage
system.
2004
SharkBite push-to-
connect plumbing
innovation is introduced
to the US market.
1976
RMC enters the European
market and is instrumental in
changing the UK from vented
to unvented water heaters.
2018
Acquisition of John
Guest, elevating RWC
to the world’s largest
manufacturer of brass
and plastic push-to-
connect products.
2023
Launch of RWC’s next
generation push-
to-connect fittings,
SharkBite Max.
1960s
Developing the first
pressure limiting valve
and temperature
pressure relief valves.
2017
Acquisition of HoldRite
for residential and
commercial new build
construction markets.
2021
Acquisition of EZ-Flo
International with the
leading appliance
connectors and supply
line brand Eastman.
2024
Acquisition of
leading Australian
‘water-out’
business Holman
Industries.
1999
To support its global
ambitions the parent
company is named
RWC (Reliance Worldwide
Corporation).
PEX-a pipe, launched together with a full range
of expansion fittings, is enabling RWC to provide
the professional plumber in the Americas with
the broadest range of pipe and fitting systems.
PEX-a pipe and expansion fittings have augmented
RWC’s existing repair and maintenance end-user
focus and enabled us to also supply the re-pipe,
new commercial construction and new residential
construction markets.
In 2021, RWC became a leader in appliance
connectors and supply lines in North America with
the acquisition of EZ-Flo International. EZ-Flo, with
the Eastman product line, is the number one brand
for appliance connectors in the US.
RWC launched two important new product ranges
in 2023 for the North American market. SharkBite
Max fittings are RWC’s next generation of industry
leading push-to-connect fittings, building on the
brand’s trusted push-to-connect technology with
key improvements for stronger, faster, and better
connections.
Today, the combined RWC business has an
enlarged global footprint and manufacturing
capabilities to reach more markets and customers
with an enhanced portfolio of complementary
products. RWC’s footprint today includes
manufacturing facilities in the US, Europe,
Australia and China and employs approximately
2,900 people worldwide.
Most recently, Holman Industries was acquired
in early 2024, providing RWC with access to the
Australian water-out segment and allowing
RWC to strengthen its overall product offering
with wholesale customers. This marked RWC’s
first entry into the drain, waste and vent (DWV)
end-market, a strategic priority in every region.
Holman has also given RWC significantly
expanded access to the retail channel in
Australia and provided the opportunity to grow
legacy RWC products within retail.
From humble beginnings we’ve become
a dynamic, growing group that’s leading
plumbing innovation to make lives
easier for customers worldwide.
Global Expansion
Innovation and
75 Years of
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Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Manufacturing
locations
CHINA
UK
UNITED STATES
AUSTRALIA
SPAIN
Americas
Global Operating
Headquarters in Atlanta
Europe, Middle East & Africa
Regional Headquarters
in London
Asia-Pacific
Regional Headquarters
in Brisbane
In Perth Australia
we manufacture:
• PVC fittings
• Watering & gardening products
In the UK we manufacture:
• Push-to-connect fittings
• Pipes
• Water filtration & drinks dispense fittings
In the United States
we manufacture:
• Push-to-connect fittings
& other fittings
• Pipes
• Valves
• Integrated installation solutions
In Melbourne Australia we manufacture:
• Push-to-connect fittings & other fittings
• Pipes
In China we manufacture:
• Appliance installation & repair products
In Brisbane Australia we manufacture:
• Valves
• PVC fittings
In Spain
we manufacture:
• Push-to-connect fittings
• Pipes
locations
Manufacturing
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Reliance
Worldwide
Corporation
Limited
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Strategy overview
Our plumbing systems target the repair and
re-model, renovation and new construction markets
and are essential to building and maintaining a
sustainable built environment.
RWC has three key drivers of growth. The first of
these is creating value through product leadership.
We use deep customer insight to deliver smart
product solutions for the end user, improve the
productivity of the contractor and enable a DIY
repair. Our products, like SharkBite and Speedfit
push to connect fittings, HoldRite brackets, and
John Guest FluidTech fittings, are better. They
are quicker and easier to install. They enable the
plumber to get each job done quicker, and get more
work done in a day. We make it easier for them to
do their work. That’s why they choose our products.
They know our brands represent efficiency. That
our brand says that the products will work together
to provide a complete solution, and that the quality
leads the market.
Equally important are our channel partner
relationships, the basis of our second pillar of
growth. In each of our three regions – the Americas,
Asia Pacific and EMEA – we have extremely strong
distributor networks. We put a lot of effort into
ensuring that we are helping our channel partners
grow value. A key element of our value proposition
is to continually add value to their shelves through
a growing array of products that are increasingly
attractive to end users and sought after by them.
This is supported by a high level of customer service
that ensures we continue to be a trusted partner,
and continued support of our brands through
innovative marketing and merchandising execution.
The third element of our strategy is industry leading
execution. This involves delivering the highest
quality products via a strong logistics capability to
ensure that our channel partners always have the
right products in stock when they need them. Being
operationally excellent, with efficient and low-cost
operations, makes us better to do business with and
should in turn translate into margin expansion for us.
At the same time, we aim to be great stewards of the
planet and our communities.
Underpinning all this is a strong, positive
organisational culture. Our strategy ensures we
provide a safe environment for our people and
actively promote diversity and inclusion. Everyone at
RWC is encouraged to be a real part of our business
and to bring their whole self to work, and our goal is
for RWC to be an organisation which is connected to
the communities in which it operates. That makes it
better for our employees, better for our customers,
and better for the business.
RWC is a global market leader and manufacturer
of plumbing and heating solutions.
Industry leading
execution
Premium quality
products and unrivalled
operational efficiency
delivering margin
growth.
Safety culture to ensure
a work environment that
protects our people
Lean manufacturing
and strategic sourcing
to drive quality, margins
and resilience
Sustainability focus
delivers a more efficient
operation while reducing
environmental impact
Value for the
distributor
Increasing value for
the distributor while
providing broadest
access to our products
for the end-user.
Superior customer
service provides the
foundation partners
can count on
Differentiated brands
that matter to the user
and put more value on
the shelf for the channel
Broad distribution puts
products in reach of the
end-user when they
need them
Solutions for
the job site
Smart product
solutions that improve
contractor productivity,
enable the DIYer, and
make lives easier.
Working in the field
to understand job
site requirements
and challenges
Product engineering
that is creating the
future of plumbing
Market engagement
to stay on top of
trends and uncover
acquisition opportunities
Creating value through product leadership
These three strategic pillars enable us to leverage our platform to drive organic growth. We seek to keep winning
new opportunities in our channels while delivering differentiated products into the market. The pillars also set
the foundation for inorganic growth through business acquisitions, leveraging our operational strength and
channel access to boost the performance of acquired targets. By pursuing both organic and inorganic growth
opportunities we are seeking to build a larger and more diversified business while simultaneously delivering
superior returns to shareholders.
Strategy overview
21
Reliance
Worldwide
Corporation
Limited
20
Annual Report
2024
See Directors’ Report for further details
on the Board Members.
Independent Non-Executive Director
Member of Audit and Risk Committee
Member of Health and Safety Committee
Member of Nomination and
Remuneration Committee
Appointed: 6 July 2020
Ian Rowden
Independent Non-Executive Director
Chair of ESG Committee
Member of Health and Safety Committee
Appointed: 27 February 2018
Sharon McCrohan
Heath joined RWC in 1990 and has worked
in each international division of the
business during his career, holding senior
management positions across multiple
functions and geographies. Heath was
President of the US business and global
Chief Operating Officer prior to his current
role as Group CEO, based in Atlanta.
Heath holds a Bachelor of Mechanical
Engineering degree.
Heath Sharp
CEO
Sandra Hall-Mulrain
Legal
Sandra joined RWC as General Counsel in
October 2019. She is a seasoned corporate
generalist with 20 years of diverse legal
experience in Fortune 100 corporations
and privately held companies. Sandra has
played a key role as a member of the senior
leadership team helping to drive strategic
initiatives across the business. Sandra holds
a B.A. degree, cum laude and a J.D. from
Rutgers University.
Dixon joined RWC in 2009 and has held
several roles, including product development,
engineering, sales, operations, global
manufacturing, strategic sourcing, and
supply chain. He was instrumental in the
launch of the SharkBite Max range in North
America along with the rollout of PEX-a pipe
and expansion fittings. Prior to joining RWC,
Dixon spent 8 years with Honda in production
engineer roles. He has a Bachelor of Science in
Mechanical Engineering.
Dixon Thuston
EMEA
Independent Non-Executive Director
Chair of Health and Safety Committee
Member of ESG Committee
Appointed: 14 April 2021
Darlene Knight
Independent Non-Executive Director
Chair of Audit and Risk Committee
Member of Nomination and
Remuneration Committee
Appointed: 1 November 2022
Brad Soller
Simon joined RWC in 2016 to lead our
Information Systems function. Simon leads
RWC’s IT strategy to transform and optimise
our technology architecture, infrastructure,
and capabilities. Prior to joining RWC, Simon
led an impressive track record of strategic
leadership roles within the IT function of
numerous banking and medical companies
in the UK and North America, steadily
developing his IT expertise and broader
business acumen throughout his career.
Simon Woods
Information Systems
Andrew Johnson
Finance
Andrew joined RWC in 2010 and was
appointed Group CFO in 2020 leading all
aspects of RWC’s financial activities. With
over 30 years of finance and accounting
leadership, he has a strong track record
in both large and mid-size international
manufacturing organisations. Andrew holds
a Bachelor of Science degree and both CPA
and CMA professional certifications.
Gillian joined RWC in April 2022 to develop
our greatest asset – our People. Gillian has
experience driving business performance
improvement by strengthening human
capital and organisational culture. She
brings a broad range of experience – from
growing businesses, integrating acquisitions,
implementing a range of talent pipeline
programs and strategic workforce planning.
She holds a BA (Hons) in English & Politics
and an MBA.
Will joined RWC in 2018 in Strategy &
Corporate Development. Shortly after
joining, he led our John Guest deal in the UK
on behalf of the RWC management team.
Will relocated his family in 2019 to our EMEA
region on a secondment opportunity as
Business and Product Development lead.
Will returned to the US as VP, Fulfilment and
E-Commerce Operations in late 2021. He was
appointed as EVP & President, Americas in
January 2023.
Will Kilpatrick
Americas
Nicole joined RWC in July 2022 to lead our
APAC region. Nicole’s deep experience spans
the building products and manufacturing
sectors, having held senior management
roles at Carter Holt Harvey and most
recently at Fletcher Building Limited.
Nicole began her career as an Engineer
with Caltex Australia and later served
in consulting for Deloitte. Nicole holds a
Chemical Engineering degree and a
master’s degree in Business Technology.
Nicole Sumich
Asia-Pacific
Independent Non-Executive Director
Chair of Nomination and
Remuneration Committee
Member of ESG Committee
Member of Health and Safety Committee
Appointed: 6 November 2019
Christine Bartlett
Non-Executive Chairman
Member of Audit and Risk Committee
Member of ESG Committee
Appointed: 11 April 2016
Stuart Crosby
Chief Executive Officer
Managing Director
Appointed: 19 February 2016
Heath Sharp
Independent Non-Executive Director
Member of Audit and Risk Committee
Member of Nomination and
Remuneration Committee
Appointed: 11 April 2016
Russell Chenu
Senior Leadership Team
Our Board Members
From left to right: Russell Chenu, Darlene Knight,
Sharon McCrohan, Stuart Crosby, Heath Sharp,
Ian Rowden, Brad Soller, Christine Bartlett.
Gillian Chandrasena
People
Leadership Team
and Senior
Board Members
23
22
Reliance
Worldwide
Corporation
Limited
Annual Report
2024
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
The financial results for the year ended 30 June 2024 are set out below. All figures are in US$ unless otherwise indicated.
Group overview
Year ended
30 June 2024
US$ million
Year ended
30 June 2023
US$ million
Net sales
1,245.8
1,243.8
Reported net profit after tax
110.1
139.7
Americas
184.3
159.5
Asia Pacific
22.0
31.9
EMEA
77.3
87.8
Corporate
(8.8)
(4.6)
Adjusted EBITDA1
274.6
274.6
Depreciation
(60.0)
(52.6)
Adjusted EBIT1
214.5
222.0
Net finance costs
(30.9)
(32.3)
Adjusted profit before tax
183.6
189.7
Tax expense on underlying profit
(36.7)
(34.0)
Adjusted net profit after tax1
146.9
155.7
Significant items
(27.1)
1.5
Tax benefit attributable to significant items
5.8
(1.8)
Tax benefit of goodwill amortisation
(15.5)
(15.7)
Reported net profit after tax
110.1
139.7
Net sales were $1,245.8 million, up 0.2% on the prior corresponding period (“pcp”). Sales include a partial contribution from
Holman Industries (Holman) which was acquired on 1 March 2024. Excluding Holman, sales were 2.4% lower than the pcp.
Sales in the Americas were down 1.4% on the pcp, Asia Pacific external sales excluding Holman were down 2.8% on the pcp,
and EMEA external sales were 9.6% lower than the pcp. Volumes in all regions were softer due to weaker remodel and residential
new construction markets, but new product revenues and the acquisition of Holman mitigated these impacts.
Adjusted EBITDA was $274.6 million, in line with the pcp. Adjusted EBITDA margin of 22.0% was broadly in line with the pcp.
Excluding Holman, Adjusted EBITDA margin improved to 22.3% compared with 22.1% in the pcp. Cost savings of $23 million were
achieved in the period, driven by prior period restructuring in the Americas, procurement savings, restructuring in EMEA, and other
continuous improvement initiatives.
Reported NPAT of $110.1 million, which includes $21.3 million (post tax) of one -off items, was 21% lower than the pcp.
The one-off items are summarised in the table below. Adjusting for these one-off items and the cash tax benefit arising
from the amortisation of goodwill, NPAT was $146.9 million, down 5.7% on pcp.
Reconciliation of Reported versus Adjusted Operating Earnings and NPAT
US$ million
EBITDA
EBIT
Tax expense
NPAT
FY24 Reported
247.5
187.5
(46.4)
110.1
Supply Smart closure of operations,
DC rationalisation
11.0
11.0
(2.8)
8.2
Americas Total
11.0
11.0
(2.8)
8.2
Holman acquisition and integration costs
4.0
4.0
(1.2)
2.8
Holman acquisition – unwind of fair value
inventory adjustment
3.4
3.4
(1.0)
2.4
APAC Croydon plant final decommissioning
0.3
0.3
(0.1)
0.2
APAC Total
7.7
7.7
(2.3)
5.4
EMEA Restructure
4.1
4.1
(0.7)
3.4
Spain PP&E impairment
4.3
4.3
–
4.3
EMEA Total
8.4
8.4
(0.7)
7.7
Total one-off costs
27.1
27.1
(5.8)
21.3
Goodwill tax amortisation
–
–
15.5
15.5
FY24 Adjusted
274.6
214.5
(36.7)
146.9
Segment review
Americas
Americas sales were $877.7 million, 1.4% lower than pcp. Weaker demand from discretionary remodel end-markets adversely
impacted volumes, but this was largely offset by new product revenues. These included the continued rollout of SharkBite Max,
distribution expansion for EZ-Flo’s gas appliance connectors, the rollout of PEX-a pipe and expansion fittings, and the launch of
HoldRite fixture boxes. The SharkBite Max product rollout has been substantially completed.
As previously announced, RWC ceased operating the Supply Smart sales model during the year. The orderly transition and sell
down of Supply Smart inventory and closure of this business unit was completed during the year. Excluding the impact of the
Supply Smart closure, America’s sales were 0.6% lower than the pcp.
Adjusted EBITDA of $184.3 million was 15.5% higher than pcp, and Adjusted EBITDA margin was 21.0% compared with 17.9% in
the pcp. The higher margin was driven by the transfer of some SharkBite Max manufacturing and assembly from Australia to the
US. As a result, the Americas benefited from product manufacturing margins previously earned in the APAC region, with a positive
EBITDA impact in the period of approximately $7 million. Cost reduction initiatives also positively impacted margins in the period.
These included a restructure of the Americas organisation undertaken in FY23, procurement savings and ongoing EZ-Flo
cost synergies.
Adjusted EBITDA reflects $10.0 million in one-off costs relating to the closure of Supply Smart which was acquired with EZ-Flo.
These consist of a non-cash impairment of intangible assets (write-down of customer relationship intangibles) of $9.4 million, and
$0.6 million in severance costs. In addition, costs of $1.0 million were incurred in the closure of two distribution centres in the US.
1 EBITDA, Adjusted EBITDA and Adjusted NPAT are non-IFRS measures used by RWC to assess operating performance.
These measures have not been subject to audit or audit review.
Financial Review
Operating and
24
25
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
Segment review
Asia Pacific
Asia Pacific sales of $190.3 million were flat on a reported basis (US$) and up 2.6% on a local currency basis (A$) versus
the pcp. Sales included $32.1 million (A$48.8 million) in sales from Holman following completion of the acquisition on
1 March 2024. Excluding Holman, sales were down 14.6% on a local currency basis. This was mainly due to the progressive
transfer of some manufacturing and all assembly of SharkBite Max fittings to the Americas during the year, with inter-company
sales down 34.9%.
External sales were 2.8% lower in local currency, reflecting lower new home construction activity in Australia. A significant
proportion of RWC’s external net sales in Australia are made in the new residential construction market. Total new dwelling units
commenced in the 12 months ended 31 March 2024 were down 12.6% on pcp2. Despite this decline, sales to RWC’s wholesale
channel partners were higher than the pcp due to new product initiatives and market share gains.
Asia Pacific Adjusted EBITDA was $22.0 million, 31% lower than pcp. The shift in production of SharkBite Max components
to the Americas compared with finished SharkBite products previously sold to the Americas negatively impacted EBITDA by
approximately A$11 million. Adjusted EBITDA margin declined by 520 basis points from 16.7% to 11.5% due principally to lower
intercompany volumes and the transfer of some SharkBite manufacturing to the US referenced above.
Adjusted EBITDA reflects $7.4 million in one-off costs relating to the acquisition of Holman ($4.0 million acquisition and
integration costs, $3.4 million relating to the unwind of inventory fair value step up), together with $0.3 million in costs relating
to the Croydon plant closure.
Segment review
Europe, Middle East, and Africa (“EMEA”)
Reported net sales in EMEA were $263.6 million, 3.1% lower in reported currency (US$) and 7.3% lower in local currency
(British Pounds).
External sales in local currency were 9.6% lower than pcp. External sales in the UK were down 9.2% on pcp, with UK plumbing
and heating sales down 6.2% in local currency due to lower volumes in residential remodel and residential new construction.
Specialty and other product sales were down 19.9% with lower volumes in telecommunications, automotive, and underfloor heating
product categories.
Continental Europe sales were 10.8% lower than pcp due to lower sales of water filtration and other specialty products, and lower
pipe sales to Eastern Europe. Weak economic conditions adversely impacted demand during the period. A gradual improvement
was evident during the year, with first half sales in Continental Europe down 20.7% on pcp, while second half sales were down 1.4%
on pcp.
Adjusted EBITDA of $77.3 million was 12.1% lower than the pcp, and 15.9% lower in local currency. Results for the year included
one-off costs of $4.1 million incurred in implementing a restructuring of the EMEA organisation, and a $4.3 million carrying value
impairment of property, plant and equipment at RWC’s manufacturing plant in Spain. Adjusted EBITDA margin excluding these
one-off costs declined from 32.3% to 29.3% due to lower sales volumes.
Taxation
The accounting effective tax rate for the period was 29.6% compared with 26.9% in the pcp. This rate excludes RWC’s
entitlement to claim amortisation of certain intangibles for taxation purposes under longstanding tax concessions available
in the USA. Goodwill is not amortised for accounting purposes under accounting standards. The benefit arising from the
amortisation of goodwill for cash tax purposes in the period was $15.5 million.
Adjusting for this item and the net tax effect of adjustments to EBITDA from one-off costs referenced earlier, tax expense for the
period was $36.7 million, representing an Adjusted effective tax rate of 20.0%.
Cash flow
Cash flow summary
Year ended
30 June 2024
US$ million
Year ended
30 June 2023
US$ million
Net cash inflow from operating activities
274.4
250.3
Net cash outflow from investing activities
(38.5)
(14.5)
Acquisition of Holman Industries
(101.7)
–
Net cash inflow (outflow) from financing activities
(131.5)
(246.6)
Net cash flow
2.8
(10.8)
Cash generated from operations was $314.2 million, an increase of 7.3% on pcp. Net working capital reduced by $16.4 million
during FY24 due to reduced inventory levels, lower trade receivables and higher trade payables.
Operating cash flow conversion3 for the year was 114% of Adjusted EBITDA versus 107% in the pcp, with the improvement mainly
due to the reduction in net working capital versus pcp.
Capital expenditure payments for property, plant and equipment acquired during the year totalled $41.3 million compared with
$42.5 million in the pcp.
Debt position and capital structure
Net debt4 at 30 June 2024 was $421.1 million (30 June 2023 – $435.0 million). Net debt to EBITDA was 1.59 times at 30 June 2024
(based on historic EBITDA for a 12 month period ended 30 June 2024) compared with 1.69 times for the pcp. Cash generated
during the period was used to fund the acquisition of Holman and reduce net borrowings.
RWC’s weighted average debt maturity was 6.3 years at 30 June 2024. At 30 June 2024, 57% of total drawn debt was at fixed
rates. The weighted average cost of funding for FY24 was 5.09%.
During the year, the Company extended the maturity of its existing syndicated loan facility across two equal tranches of
$217.5 million with a revised maturity date of November 2027 and November 2028. The maturity of Tranche A of the existing
bilateral US dollar facility ($45 million) was also extended by three years to November 2027.
As a result of strong cash generation during the year, RWC is close to the lower end of its target leverage range of 1.5 times to
2.5 times net debt to EBITDA. The Company has assessed that its optimal capital structure will be achieved by maintaining its
net debt levels to achieve a leverage ratio (net debt to EBITDA) in the range of 1.5 to 2.5 times.
RWC expects that it will remain in compliance with all borrowing facilities financial covenants.
2 Source: Australian Bureau of Statistics.
3 FY24: Cash flow from operations to Adjusted EBITDA of $274.6 million
4 Excludes leases
Financial Review
Operating and
26
27
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
OPERATING AND FINANCIAL REVIEW
For financial year ended 30 June 2024
Final dividend and on-market share buy-back
Following a review of RWC’s distribution policy settings during the year, changes to the form of distribution were implemented.
While RWC still intends to distribute between 40% and 60% of annual NPAT, the Company intends that the total distribution
amount for a period will be allocated approximately 50% to a cash dividend and 50% to on-market share buy-backs. Dividends
are still expected to be either unfranked or only partly franked.
A final distribution amount of US5.0 cents per share (US$39.3 million) has been declared, comprising an unfranked final cash
dividend of US2.5 cents per share and the undertaking of an on-market share buy-back for US$19.6 million (equivalent in total to
US2.5 cents per share).
Total distributions declared for the year ended 30 June 2024 are US9.5 cents per share totalling $74.8 million which represents
68% of Reported NPAT and 51% of Adjusted NPAT.
FY25 Trading outlook
Trading conditions in FY25 will partly depend on economic conditions in RWC’s key markets. Interest rate rises since 2022 have
impacted residential markets through slowing house price appreciation or declining house values, lower turnover of existing
houses, lower residential new construction and reduced home remodel activity. Consequently, any improvement in demand
drivers in FY25 will be partly dependent on an easing of interest rates in RWC’s key geographies, particularly in the second half
of FY25.
For the first six months of trading in FY25 RWC expects group external sales to be broadly flat, within a range of up or down by
low single digit percentage points, relative to the pcp, excluding the impact of Holman and Supply Smart. RWC expects a similar
trajectory in each region. New product and revenue initiatives in each region are expected to help mitigate the impact of weaker
end-markets. Cost reduction and efficiency measures will be pursued and RWC is targeting an improvement in consolidated
EBITDA margin (excluding Holman) in the first half of FY25 relative to the pcp. Holman is on track to meet the expectations
established at the time of its acquisition.
RWC believes that its end market exposure globally to the less cyclical repair and maintenance sector will continue to provide
greater resilience to economic downturns compared with the more cyclical new residential construction market. RWC’s products
feature in non-discretionary repair projects and our brands are recognised “go to” products for repair work. Given uncertainty
around the full year economic outlook and potential interest rate changes, however, RWC is not providing quantitative guidance
for FY25 full year earnings expectations.
Financial metrics
The following key assumptions are provided for FY25:
• Having achieved a reduction in working capital in FY24, RWC expects operating cash flow conversion in FY25 to be above
90%, consistent with our long-term target.
• Capital expenditure is expected to be in the range of $40 million to $45 million.
• Depreciation and amortisation expense is expected to be in the range of $70 million to $75 million.
• Net interest expense is expected to be in the range of $28 million to $30 million, inclusive of interest expense on lease liabilities.
• The adjusted effective tax rate is expected to be in the range of 18% to 21%.
• Cost reduction measures are expected to deliver $10 million to $15 million in savings for the full year.
Variations in economic conditions, trading conditions or other circumstances may cause these key assumptions to change.
Financial Review
Operating and
29
28
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
The Directors present their report together with the Financial Report comprising Reliance Worldwide Corporation Limited
(“the Company”) and its controlled entities (together “RWC” or “the Group”) for the financial year ended 30 June 2024
(“reporting period”) and the Auditor’s report thereon.
The following sections, which are presented separately, form part of and are to be read in conjunction with this Directors’ Report:
• Operating and Financial Review (page 24); and
• Remuneration Report (page 44)
Directors
The Directors of the Company at any time during or since the end of the reporting period were:
Appointed
Stuart Crosby (Chairman)
11 April 2016
Heath Sharp (Chief Executive Officer and Managing Director)
19 February 2016
Christine Bartlett
6 November 2019
Russell Chenu
11 April 2016
Darlene Knight
14 April 2021
Sharon McCrohan
27 February 2018
Ian Rowden
6 July 2020
Brad Soller
1 November 2022
Details of the experience and qualifications of Directors in office at the date of this report are:
Stuart Crosby
Independent Non-Executive Chairman
Member of Audit and Risk Committee
Member of Environment, Social and Governance Committee
Mr. Crosby was the Chief Executive Officer and President of Computershare Limited for nearly eight years until June 2014.
Mr. Crosby previously held a number of senior executive positions across the Computershare business. Prior to joining
Computershare, Mr. Crosby worked for the Australian National Companies and Securities Commission, the Hong Kong
Securities and Futures Commission and at ASX Limited. Mr. Crosby is a former Chair of AMES Australia.
Other listed company directorships in the past 3 years: None
Heath Sharp
Chief Executive Officer and Managing Director
Mr. Sharp was appointed Chief Executive Officer in 2015. He joined RWC in 1990 as a Design Engineer in the Brisbane based
Product Development team. He has worked in each international division of the business during his career, holding senior
management positions in Engineering, Product Management, Sales and Operations. He was appointed General Manager of the
Cash Acme facility in Alabama following its acquisition by RWC in 2002. He returned to lead the Australian division in late 2004,
the largest operation at the time. Mr. Sharp moved back to the USA in 2007 to re-join the US business and steer its rapid growth
in RWC’s largest market. Mr. Sharp held the roles of President of the USA business and Chief Operating Officer prior to his
current role as Chief Executive Officer. Mr. Sharp holds a Bachelor of Mechanical Engineering degree from the University of
Southern Queensland.
Other listed company directorships in the past 3 years: None
Christine Bartlett
Independent Non-Executive Director
Chair of Nomination and Remuneration Committee
Member of Environment, Social and Governance Committee
Member of Health and Safety Committee
Ms. Bartlett is an experienced CEO and senior executive with extensive line management experience gained through roles with
IBM, Jones Lang LaSalle and National Australia Bank Limited. Her executive career has included Australian, regional and global
responsibilities based in Australia, the USA and Japan. She is currently a Non-Executive Director of Mirvac Group, Australian
Clinical Labs Limited and TAL; and was previously a director of GBST Holdings Limited, Sigma Healthcare Limited, PropertyLook,
National Nominees Ltd, the Australian Custodial Services Association, icare and The Smith Family. She is a member of the UNSW
Australian School of Business Advisory Council, Chief Executive Women and the Australian Institute of Company Directors.
Ms. Bartlett holds a Bachelor of Science from the University of Sydney and has completed senior executive management
programs at INSEAD.
Other listed company directorships in the past 3 years:
Australian Clinical Labs Limited (since August 2023)
Mirvac Group (since December 2014)
Sigma Healthcare Limited (March 2016 until December 2023)
Russell Chenu
Independent Non-Executive Director
Member of Audit and Risk Committee
Member of Nomination and Remuneration Committee
Mr. Chenu is an experienced corporate and finance professional who held senior finance and management positions with a
number of ASX listed companies. His last executive role was Chief Financial Officer of James Hardie Industries plc from 2004 to
2013. He is currently the Chair of Vulcan Steel Limited and a Non-executive Director of CIMIC Group Limited. Mr. Chenu holds a
Bachelor of Commerce from University of Melbourne and an MBA from Macquarie Graduate School of Management, Australia.
Other listed company directorships in the past 3 years:
Vulcan Steel Limited (since 2021)
CIMIC Group Limited (since June 2014. The company delisted from the ASX in May 2022)
Metro Performance Glass Limited (July 2014 until August 2021)
Darlene Knight
Independent Non-Executive Director
Chair of Health and Safety Committee
Member of Environment, Social and Governance Committee
Ms. Knight’s operational experience was gained with multi-national manufacturing businesses, primarily in the automotive
sector, where she held strategic and operations focused roles. Darlene has held senior leadership roles at both supplier and OEM
organisations, including General Motors Corporation, EDSCHA GmbH, Johnson Controls, Inc. and Adient, Plc. She has experience
in engineering, global manufacturing and quality. Her roles have included P&L responsibility. Darlene is a director of Fabrinet
(NYSE: FN) and eLeapPower. Ms. Knight holds a Master of Science in Engineering Science from Rensselaer Polytechnic Institute
and a Bachelor of Science in Industrial Administration from Kettering University.
Other listed company directorships in the past 3 years:
Fabrinet (since January 2022)
Directors’ Report
31
30
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
Sharon McCrohan
Independent Non-Executive Director
Chair of Environment, Social and Governance Committee
Member of Health and Safety Committee
Ms. McCrohan is an experienced media and strategic communications consultant with a career spanning almost 30 years.
Ms. McCrohan has been an advisor to Federal and State government leaders and cabinets, private sector boards, sporting
bodies, statutory authorities, charities and government agencies. Ms. McCrohan has extensive experience in media and
communications, policy development, government and stakeholder relations and executive team leadership. Ms. McCrohan is
a non-executive director of Racing Victoria Limited, the Ovarian Cancer Research Foundation Board and the Transport Accident
Commission (Victoria). Ms. McCrohan holds a Bachelor of Arts (Journalism) from Royal Melbourne Institute of Technology and is
a Graduate member of The Australian Institute of Company Directors.
Other listed company directorships in the past 3 years: None
Ian Rowden
Independent Non-Executive Director
Member of Audit and Risk Committee
Member of Health and Safety Committee
Member of Nomination and Remuneration Committee
Mr. Rowden’s executive career included time as a CEO and in various senior executive roles at a regional and global level spanning
commercial, strategy, M&A, marketing and operational leadership at The Coca-Cola Company, The Callaway Golf Company,
Wendy’s International, Saatchi and Saatchi and The Virgin Group.
Mr. Rowden is currently a non-executive director and Chair of the Nomination and Remuneration Committee of Enero Group
Limited (ASX: EGG), a non-executive director of Guzman y Gomez Limited (ASX: GYG), DuluxGroup International (UK) and was
formerly a director of QMS Media Limited and Virgin Galactic (NYSE: SPCE). He also chairs the Murdoch Children’s Research
Institute Marketing Council and is a partner and investment advisory board member for Innovate Partners, a US based private
equity/venture capital company, and a senior advisor to Bowery Capital.
Other listed company directorships in the past 3 years:
Enero Group Limited (since November 2018)
Guzman y Gomez Limited (since April 2024)
Brad Soller
Independent Non-Executive Director
Chair of Audit and Risk Committee
Member of Nomination and Remuneration Committee
Mr. Soller’s career commenced with PriceWaterhouseCoopers in Johannesburg and London. He then spent over 25 years in corporate
organisations, including Chief Financial Officer and other senior finance and/or leadership roles at Thorn plc, BAA McArthur Glen
Limited, Lend Lease Group, David Jones and Metcash. Mr. Soller is a non-executive director and Chair of the Audit and Risk Committee
of Bapcor Limited (ASX: BAP) and Big River Industries Limited (ASX: BRI). He is a Chartered Accountant (South Africa) and holds a
Master of Commerce, Bachelor of Accounting and Bachelor of Commerce from the University of Witwatersrand (South Africa).
Other listed company directorships in the past 3 years:
Bapcor Limited (since November 2022)
Big River Industries Limited (since September 2021)
Company Secretary
David Neufeld
Mr. Neufeld has been Company Secretary since April 2016. He has extensive experience in chartered accounting and corporate
organisations, including nearly 20 years’ experience as a Chief Financial Officer and/or Company Secretary of ASX listed companies.
Mr. Neufeld is experienced in financial and management reporting, corporate compliance, governance and risk management, audit
and business acquisitions and divestments. Mr. Neufeld holds a Bachelor of Commerce (Honours) from The University of Melbourne
and is a member of Chartered Accountants - Australia & New Zealand and a Graduate member of The Australian Institute of
Company Directors.
Meetings of Directors
The number of Board meetings and meetings of Board Committees held and the number of meetings attended by each of the
Directors of the Company during the reporting period are listed below. The membership of each Board Committee was reviewed
during the 2024 financial year.
Director
Board
Audit and Risk
Committee
ESG Committee
Health and Safety
Committee
Nomination and
Remuneration
Committee
Held1
Attended1
Held1
Attended1
Held1
Attended1
Held1,2
Attended1,2
Held1
Attended1
Christine Bartlett
13
13
–
–
5
5
5
5
7
7
Russell Chenu
13
13
7
7
–
–
–
–
7
7
Stuart Crosby
13
13
7
7
5
5
–
–
–
–
Darlene Knight
13
13
–
–
5
5
5
5
–
–
Sharon McCrohan
13
13
–
–
5
5
5
5
–
–
Ian Rowden
13
13
7
7
–
–
5
5
7
7
Heath Sharp
13
13
–
–
–
–
–
–
–
–
Brad Soller
13
13
7
7
–
–
–
–
7
7
Directors who are not members of Board Committees have a standing invitation to attend Committee meetings and do attend
from time to time. The above table only reflects attendance at Committee meetings by members of the relevant Committees.
Environmental regulation and performance
RWC’s manufacturing operations have to date not been adversely affected by environmental laws and regulations.
Manufacturing operations primarily involve brass forging and machining, PEX extrusion, plastic moulding and product assembly.
Historically, the environmental impact of these processes has been minimal and RWC believes it meets current environmental
standards in all material respects.
Environmental and social sustainability are core to RWC’s operations and important to its strategy. An Environmental, Social
and Governance (“ESG”) Committee of the Board provides oversight on ESG initiatives, objectives, strategies and targets.
We understand that running our business responsibly is vital to our long-term sustainability and the decisions we make have
consequences for the economy, society and the environment. RWC releases annual ESG reports. Copies of these reports can be
viewed on the Company’s website at www.rwc.com. The reports provide information on our approach to sustainability, identify
our material topics and how they are currently managed, our achievements and areas for improvement.
Global macro trends related to water are creating challenges for the built environment that RWC can help to solve. There are
opportunities for RWC to make a positive contribution through the products we design and manufacture. We have existing
solutions that we can provide and are also continually investing in new products and solutions. These may have different
applications across the regions in which we operate. In particular, RWC has a clear role in the provision of clean water and
sanitation and also in developing sustainable and resilient infrastructure, particularly in the context of cities. Since water and
energy are closely connected, water efficiency also contributes to energy efficiency.
As a manufacturer and distributor, we also recognise that our operations have an environmental footprint and that we need
to manage the social and environmental impacts of our supply chain. We have committed to net zero for scope 1 and scope 2
GHG emissions by 2050. This commitment is backed by an actionable plan to achieve incremental reductions toward a 42%
absolute reduction target by 2030 against an FY2021 baseline. These scope 1 and scope 2 targets are based on the Paris Climate
Agreement goal to limit global warming to 1.5 °C. It is our aspiration to achieve net zero for all scopes by 2050. Details of our
progress are provided in the 2024 ESG Report.
1 Number of meetings held and attended during the period the Director was a member of the Board and/or each Committee.
2 The Health and Safety Committee also conducted several site visits during the period which have not been recorded as formal meetings of the Committee.
Directors’ Report
33
32
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
Principal activities
The principal activities of RWC are the design, manufacture and supply of high quality, reliable and premium branded water flow,
control and monitoring products and solutions for the plumbing and heating industry.
Significant changes in the state of affairs
During the reporting period, the Group completed the acquisition of the Holman Industries business for A$160 million (US$104
million). The acquisition was debt funded using the Group’s existing committed borrowing facilities. Further details are contained in
the Operating and Financial Review and the 30 June 2024 financial statements.
There were no other significant changes in the state of affairs of the Group during the reporting period. The Operating and Financial
Review contains comments on external events which have impacted and continue to impact business activities and results.
In preparing the consolidated financial statements in conformity with Australian Accounting Standards, due consideration has been
given to the judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. The Group has managed, and
continues to manage, the risks arising from geopolitical and macroeconomic events which are impacting the estimation uncertainty
in the preparation of the consolidated financial statements. At 30 June 2024, the Group has reassessed all significant judgements,
assumptions and critical estimates included in the consolidated financial statements, including but not limited to, provisions
against trade debtors and inventory and impairment of non-current assets. Actual results may differ from these estimates. Details
of the main judgements, estimates and assumptions applied are set out in the notes to the consolidated financial statements.
Material business risks
RWC continues to evolve its risk management policies and processes. Set out in the table below are:
• a summary of specific material business risks which could impact upon RWC’s ability to achieve its business objectives
and/or its financial results and position; and
• management plans to mitigate against each business risk listed.
The information is provided as a guide to RWC’s current risk management focus. The list is provided in no particular order and is
not exhaustive.
Risk
Description
Management plans
RWC is exposed
to changes in
general economic
conditions,
legislation and
regulation which
may impact activity
in RWC’s end-
markets.
• RWC’s financial performance is largely dependent
on activity in the residential and commercial repair
and renovation and new construction end-markets
in the North American, Asia Pacific and European
regions. Activities in these end-markets are impacted
by changes in general economic conditions; and to
legislation and regulation (for example, changes to
building or plumbing codes; tariff rates and import
duties; and trade and regulatory arrangements).
Activities in the repair end-market may also be
impacted by extreme weather events.
• A prolonged downturn in general economic conditions
either globally or in any geographic region in which
RWC operates may impact demand for plumbing
services in RWC’s end-markets, thereby decreasing
demand for RWC’s products. Ongoing geopolitical and
macroeconomic events continue to cause business
challenges and uncertainties which may continue for
a substantial period of time. Any such downturn may
have a material adverse impact on RWC’s operations
and financial results.
• Processes are in place to be able to
respond to changes in conditions and
adjust production, delivery and raw
materials purchasing requirements as well
as manage operating and overhead costs
as considered necessary and appropriate.
RWC’s systems and processes are
supported by audit protocols and
monitoring of key performance indicators.
• Key economic indicators are monitored
for data which assist the business in being
proactive in its decision making.
• RWC regularly reviews the inputs and
methodologies of its forecasting and
financial planning systems to improve
reaction and response times to abnormal
events.
Loss of
customer
risk
• There can be no guarantee that key customers will
continue to purchase the same or similar quantities
of RWC’s products as they have historically.
Competition, including the price of competing
products relative to RWC’s products, could impact
demand for RWC’s products.
• The loss of a key customer or a significant reduction
in the volume of products purchased by one or
more key customers may adversely impact RWC’s
financial performance.
• Maintain connections with, and deliver
ongoing business opportunities to, key
customers.
• Maintaining high levels of accurate and
on-time delivery is valued by customers.
• Continuing focus on differentiated high
quality products and solutions as well as
customer service.
• Investment in research and development
to provide high quality innovative products
and remain the supplier of choice.
• Continued focus on diversifying the
customer base to reduce the potential
impact of this risk.
Directors’ Report
35
34
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
Risk
Description
Management plans
Materials supply
and price risk
• Any adverse change in RWC’s ability to procure raw
materials, a material increase in the cost of raw
materials or any increase in indirect production costs
would result in an increase in RWC’s overall costs.
RWC’s profitability could be adversely impacted if it is
unable to pass on such cost increases to its customers.
• RWC aims to have appropriate
agreements in place with major suppliers.
• Active management of procurement
processes.
• Active in passing on higher costs to
customers through price increases.
These active processes are expected
to continue.
• Continuing efforts to "multi source" key
materials and components to enable price
verification, quality control management
and reduce risk of supplier concentration.
• RWC periodically benchmarks prices for
key material/product supply.
Foreign
currency risk
• RWC’s results are impacted by exchange rate
movements. In particular, exposure to USD, AUD,
GBP, Euro and Yuan.
• Movements in exchange rates can impact profitability
and cash flows.
• RWC does not typically hedge its foreign
exchange exposures. RWC currently
benefits from several "natural hedges"
against currency movements. For
example, the impact of foreign currency
denominated purchases against foreign
currency sales.
• Foreign currency risk is monitored and
analysed with consideration given to
alternative strategies to manage foreign
exchange risk as the business expands
and exposure to other currencies
increases.
• Where appropriate, transaction timings
are optimised to minimise impacts.
• RWC reports its financial results in US
dollars consistent with the functional
currency in which the majority of the
business operates. This reporting
reduces the impact of foreign currency
movements on reported results.
Risk
Description
Management plans
Events affecting
manufacturing or
delivery capability
• The equipment and management systems necessary
for the operation of RWC’s facilities may break down,
perform poorly, fail or be impacted by a fire, earthquake
or major weather event (such as a snow storm, tornado,
cyclone or flood) resulting in delays, increased costs or
an inability to meet customer demand.
• Events could also arise which impact upon RWC’s
ability to ship and deliver product from its facilities in a
timely manner. RWC has an increased supply chain risk
in China following the EZ-Flo and Holman acquisitions.
Current geopolitical actions are examples of events
which can result in significant market disruption
leading to increased risk around business planning and
management.
• Any significant or sustained interruption to RWC’s
manufacturing or delivery processes may adversely
impact RWC’s net sales and profitability.
• RWC has manufacturing facilities
located in five countries. This geographic
dispersion reduces the impact on total
production output if an adverse event
occurs at one or more of the sites.
• RWC has well established long term
machine maintenance support programs
with key suppliers.
• RWC carries stores of key maintenance
spare parts to support timely repairs and
maintenance of its production equipment
and facilities.
• Continuing investment in high quality
machinery enables machine substitution
in the event of a breakdown.
• Extensive operator training enables
rotation/substitution of machine
operators.
• Safety hazard training undertaken and
appropriate onsite procedures in place.
• Business interruption insurance in place.
Climate related
risks and impacts
• As a manufacturer and distributor, we recognise that
RWC’s operations have an environmental footprint and
that we need to manage the social and environmental
impacts of RWC’s supply chain.
• There may be climate related factors which impact
RWC’s operations in both the near and longer term.
For example, these impacts could be in areas such
as availability and cost of materials used in RWC’s
products or manufacturing processes, transport and/or
occurrence of extreme weather events. Any significant
or sustained impacts could adversely affect RWC’s
financial performance and/or financial position.
• Dedicated Board sub-committee
monitors and oversees RWC’s response
to climate related risks and impacts.
• Continuing to assess climate related
business risks and how best to mitigate
these.
• An ongoing project to identify and capture
emissions information and then set
appropriate, practical targets and plans
to achieve these. Committed to reduce
Scope 1 and Scope 2 emissions to zero by
2050 (targeting minimum 42% reduction
by 2030). Aspiration to achieve net zero
for all scopes by 2050.
• Material climate related risks identified
are incorporated into RWC’s enterprise
risk management processes. ESG
considerations added to supply chain
processes and capital expenditure
approval requirements.
• RWC’s annual ESG reports include
information on the approach to managing
and mitigating climate related risks and
impacts.
• Working toward compliance with
forthcoming reporting standards,
including achieving required levels of
external assurance.
Directors’ Report
37
36
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
Risk
Description
Management plans
Impact of product
recalls, product
liability claims or
claims against
RWC where a
product has not
been correctly
installed by a
third party.
• RWC is exposed to the risk of product recalls and
product liability claims where a defect in a product
sold or supplied by RWC or incorrectly installed by a
third-party contractor could result in, results in or
is alleged to have resulted in, personal injury or
property damage.
• RWC may suffer loss as a result of claims for which
it is not insured or if cover is denied or exceeds
available limits.
• Continuing investment in production
technology and quality control processes
to minimise the risk of product defects.
• RWC maintains rigorous quality assurance
accreditation in all its manufacturing/
distribution locations. These quality
systems are regularly audited by external
third parties.
• Investment in training of professional
contractors on correct installation and use
of products.
• Maintain appropriate insurance policies.
Key personnel risk
• RWC’s success depends on the continued active
participation of its key personnel.
• If RWC were to lose any of its key personnel or if it
were unable to employ appropriate additional or
replacement personnel, its operations and financial
results could be adversely affected.
• RWC seeks to employ high quality
personnel who are remunerated by
market competitive arrangements.
• Historically, there is a good record of
retaining key personnel.
• Succession planning, talent management
and organisation design capabilities
are a focus of the Board and overseen
on its behalf by the Nomination and
Remuneration Committee.
Information
Technology
(including cyber
security)
• Technological advancements (for example, the
increasing use of artificial intelligence products) and
risks of cyber-crime can impact RWC’s IT systems
and processes and make them vulnerable to attack if
appropriate security measures are not in place.
• IT security policies and recovery plans
in place.
• RWC has a dedicated cyber security
team which conducts ongoing system
monitoring and testing, including
reviewing and regularly updating security
protocols.
• Appropriate insurance policies.
• Employees are a critical line of defence in
protecting against cyber-crime. Regular
training is provided to employees. Alerts
and reminders to remain vigilant are also
regularly sent.
• Fully maintained hardware and software
security measures provide a high watch
status on illegal attempts to penetrate
RWC’s systems.
Capital management: Dividends and on-market share buy-back
The Company’s dividend policy has been an intention to distribute between 40% and 60% of annual NPAT. Following a review
of it’s distribution policy settings the Company announced in February 2024 that it still intends to distribute between 40% and
60% of annual NPAT. However, the form of the distribution will be altered so that the total distribution amount will comprise a
cash dividend component and an on-market share buy-back component. The Board recognises the desire of some investors to
continue receiving cash dividends. The Board also considers that a capital management strategy utilising on-market share buy-
backs will be value accretive for shareholders. The Board’s intention, therefore, is that the total distribution amount for a period
will be allocated approximately 50 per cent to a cash dividend and 50 per cent to on-market share buy-backs.
Dividends are still expected to be either unfranked or only partly franked.
Since the end of the reporting period, the directors have resolved to declare a final distribution amount for the year ended
30 June 2024 of US5.0 cents per share (US$39.3 million), comprising an unfranked interim cash dividend of US2.50 cents per
share and the undertaking of an on-market share buy-back for US$19.6 million (equivalent in total to US2.50 cents per share).
The aggregate distribution amount declared or paid for the year ended 30 June 2024 is US$74.8 million which represents 68%
of NPAT and 51% of Adjusted NPAT for the reporting period. The total distribution amount of US9.5 cents per share is consistent
with the distribution for the prior period.
An on-market share buy-back was completed during March and April 2024. The Company bought back and cancelled 4,789,473
shares at a cost of A$27.3 million.
Cash dividends
An unfranked final dividend for the financial year ended 30 June 2023 of US5.0 cents per share, was paid to eligible shareholders
on 6 October 2023. The dividend was paid in Australian dollars at the rate of 7.748 cents per share.
An unfranked interim dividend for the financial year ended 30 June 2024 of US2.25 cents per share was paid to eligible
shareholders on 5 April 2024. The dividend was paid in Australian dollars at the rate of 3.459 cents per share.
As noted above, since the end of the reporting period, the Directors have resolved to declare an unfranked final dividend for
the financial year ended 30 June 2024 of US2.5 cents per share. The dividend will be paid in Australian dollars at the rate of
3.781 cents per share. The record date for entitlement to the dividend is 6 September 2024. The dividend is payable to eligible
shareholders on 4 October 2024.
The Company does not have a dividend reinvestment plan.
Events subsequent to reporting date
As noted above, since the end of the reporting period, the Directors have resolved to declare an unfranked final dividend of
US2.5 cents per share and that the Company will undertake an on-market share buy-back for US$19.6 million.
The Directors are not aware of any matters or circumstances that have occurred since the end of the reporting period that have
significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs
of the Group in subsequent financial reporting periods which have not been covered elsewhere in this report or the financial
statements.
Likely developments and prospects
Details of likely developments for RWC and prospects for future financial reporting periods are contained in the
Operating and Financial Review.
Share options
Details of share options granted under the Company’s Equity Incentive Plan are set out in the Remuneration Report. No other
share options have been granted by the Company at the date of this report.
Directors’ Report
39
38
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
DIRECTORS’ REPORT
For the year ended 30 June 2024
DIRECTORS’ REPORT
For the year ended 30 June 2024
Directors’ interests
Details of Directors’ interests in the Company’s issued securities are set out in the Remuneration Report.
Corporate Governance Statement
The Company’s Corporate Governance Statement can be viewed at www.rwc.com/investors/corporate-governance.
Indemnification and Insurance of Officers
The Company’s Constitution provides that the Company may indemnify any current or former Director, Secretary or executive
officer of the Company or of a subsidiary of the Company out of the property of the Company against every liability incurred by
a person in that capacity whether civil or criminal or of an administrative or investigatory nature in which the person becomes
involved because of that capacity.
In accordance with the provisions of the Corporations Act 2001, the Company has a Directors’ and Officers’ Liability policy
which covers all past, present or future Directors, Secretaries and executive officers of the Company and its controlled entities.
The terms of the policy specifically prohibit disclosure of details of the amount of the insurance cover and the premium paid.
The indemnification and insurances are limited to the extent permitted by law.
Audit and non-audit services
Fees paid or payable by RWC for services provided by KPMG, the Company’s auditor, during the reporting period were:
2024
US$
KPMG Australia
Audit services
780,622
Other assurance and non-audit services
• Tax services
32,379
• Other assurance services
31,549
Total fees paid or payable to KPMG Australia
844,550
Overseas KPMG offices
Audit services
203,902
Other assurance and non-audit services
• Tax services
80,132
Total fees paid or payable to overseas KPMG offices
284,034
Total fees paid or payable to KPMG
1,128,584
The Directors, in accordance with advice from the Audit and Risk Committee which has considered the non-audit services
provided by KPMG during the financial year ended 30 June 2024, are satisfied that the provision of those non-audit services
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and did not
compromise the auditor independence requirements of the Corporations Act 2001, for the following reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed
by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and
• the non-audit services provided do not undermine the general principles relating to auditor’s independence as set out in
APES110 - Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work,
acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly
sharing risks and rewards.
Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001
The lead auditor’s independence declaration set out on page 68 forms part of this Directors’ Report.
Rounding off
In accordance with the Australian Securities and Investments Commission Corporations (Rounding in Financial / Directors’
Reports) Instrument 2016/191 values are rounded to the nearest thousand dollars, unless otherwise stated. Where an amount is
$500 or less the amount is rounded to zero, unless otherwise stated.
This report is made in accordance with a resolution of the Directors.
Stuart Crosby
Chairman
Melbourne
20 August 2024
Heath Sharp
Chief Executive Officer
and Managing Director
Directors’ Report
41
40
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
SHAREHOLDER LETTER
SHAREHOLDER LETTER
Dear Shareholders,
On behalf of the Board, I am pleased to present RWC’s Remuneration Report for the year ended 30 June 2024.
Remuneration framework
We have now completed the transition to the revised remuneration framework that was introduced with effect from
1 July 2021. As I advised last year, several changes to performance measures for LTI grants were introduced from
the commencement of FY2024. These related to an additional performance condition focused on return on capital
employed and the introduction of a service period only component. The service period only component is consistent
with remuneration package design for long term incentives awarded in the USA, being the primary peer group country
which we compare against. It is usual practice in the USA to have remuneration packages with lower base salaries and
higher at-risk components, including larger equity grants, than is typical in the Australian market. This includes equity
grants which are not subject to performance conditions.
The Board believes that the remuneration framework meets the Company’s objectives of:
• being structured to be equitable and aligned with the long term interests of the Company and shareholders;
• adequately balancing the need to attract and retain the best people to run RWC’s business while ensuring that
remuneration is linked clearly to shareholder returns; and
• remaining comparable with appropriate industry and geographical peer groups.
No changes to the remuneration framework or performance criteria are currently proposed. Some of the objectives of
the Committee for FY2025 include:
• continuing to review remuneration arrangements to confirm that market competitive remuneration packages are in
place to attract and retain high calibre executives;
• considering the process for measuring achievement of STI objectives, including if a balanced scorecard approach
should be introduced; and
• reviewing performance criteria for LTI grants to confirm they remain appropriate.
Please refer to Section B of the Remuneration Report for further details on the remuneration framework.
Financial and operating performance
FY2024 was another challenging year again impacted by geopolitical and economic factors. Notwithstanding, our
trading results were in line with the expectations we had advised during the reporting period. Net sales for FY2024 were
$1,245.8 million, up 0.2% on the prior year. Sales included a partial contribution from Holman Industries which was
acquired on 1 March 2024. Volumes in all regions were softer due to weaker remodel and residential new construction
markets, but new product revenues and the acquisition of Holman mitigated these impacts. Over 70% of revenue is
generated in the Americas region.
Reported EBITDA for the period was $247.5 million, 10% lower than for FY2023. Excluding one-off items, Adjusted
EBITDA was $274.6 million, in line with FY2023. Adjusted EBITDA margin of 22.0% was broadly in line with FY2023.
Reported NPAT for FY2024 of $110.1 million was 21% lower than FY2023. Adjusting for one-off items and the cash tax
benefit arising from the amortisation of goodwill, NPAT was $146.9 million, down 6% on FY2023.
Health and safety remains RWC’s highest priority. The Board and management made strong progress in executing the
multi-year safety improvement program launched in FY2023. This focus resulted in a significant reduction in the number
of injuries in our workplaces.
FY2024 remuneration outcomes
Section C of the Remuneration Report provides details on FY2024 remuneration outcomes. For Executive KMP,
the mix of financial and non-financial criteria to be applied in determining STI awards is 70% Group EBIT and 30%
Personal KPI goals.
For financial criteria, the minimum target for STI entitlement (90% x Budget EBIT) was achieved for FY2024
meaning an STI award for financial criteria was made to Executive KMP. Executive KMP also received STI awards
after assessment of non-financial and personal objectives. In light of trading conditions in our major markets,
the Board remains pleased with the performance of our senior executives.
I look forward to presenting the Remuneration Report at the Annual General Meeting.
Christine Bartlett
Chair, Nomination and
Remuneration Committee
Shareholder Letter
43
42
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
Introduction
The Directors present the Remuneration Report for Reliance Worldwide Corporation Limited (“the Company”) and its controlled
entities (together “RWC” or “the Group”) for the financial year ended 30 June 2024 (“FY2024” or “the reporting period”). This
Remuneration Report forms part of the Directors’ Report and has been audited in accordance with the requirements of the
Corporations Act 2001 (Cth).
This Remuneration Report sets out remuneration arrangements for RWC’s Key Management Personnel (“KMP”) for the
reporting period
This Remuneration Report contains the following sections:
A. Governance and general principles
B. Principles of remuneration framework
C. Remuneration outcomes for FY2024
D. FY2025 objectives and Executive KMP remuneration arrangements
E. Other required disclosures
All amounts reported in this Remuneration Report, including prior period comparatives, are presented in US dollars
unless stated otherwise.
KMP for the reporting period are listed below. KMP are determined in accordance with accounting standard AASB 124: Related
Party Disclosures (“AASB 124”). Under Australian Accounting Standards, the term KMP refers to directors (both non-executive
directors and executive directors) and those persons having the authority and responsibility for planning, directing and controlling
the activities of RWC, directly or indirectly. All KMP held their positions for the entire reporting period unless otherwise stated.
Name
Executive role
Non-Executive Directors
Christine Bartlett
Russell Chenu
Stuart Crosby
Darlene Knight
Sharon McCrohan
Ian Rowden
Brad Soller
Executive KMP
Heath Sharp
Managing Director and Chief Executive Officer (“CEO”)
Andrew Johnson
EVP and Chief Financial Officer (“CFO”)
For the remainder of this Remuneration Report and when appropriate, KMP are referred to as either Non–Executive Directors or
Executive KMP as set out above.
The CEO and CFO were considered Executive KMP during FY2024 having regard to the Group’s management structure and the
criteria in AASB 124. This assessment is consistent with prior years.
There have been no changes to KMP since the end of the reporting period to the date of this report.
A. Governance and principles
The Board believes that the Company’s success depends upon the performance of all employees and that remuneration
policies should be structured to deliver positive benefits for the Company, shareholders and employees.
The Nomination and Remuneration Committee (“NRC”) is responsible for:
• reviewing and recommending to the Board the remuneration arrangements for the CEO and Non-Executive Directors;
• reviewing and approving the remuneration arrangements of the CEO’s direct reports; and
• overseeing the operation of the Company’s Equity Incentive Plan (“Plan”), including making recommendations to the
Board about offers to be made under the Plan.
In discharging its responsibilities, the NRC must have regard to the following policy objectives:
• remuneration structures are to be equitable and aligned with the long-term interests of the Company and its shareholders;
• attract and retain skilled executives, especially in the main markets where RWC operates (North America, Asia Pacific
and Europe). Benchmarking is undertaken periodically to confirm that arrangements are market competitive; and
• structure short-term and long-term incentives that are challenging and linked to the creation of sustainable
shareholder returns.
The NRC conducts regular reviews and monitors the implementation of the Company’s remuneration framework to confirm it:
• encourages and sustains a culture aligned with the Company’s values;
• supports the Company’s strategic objectives and long-term financial soundness; and
• is aligned with the Company’s risk management framework and risk appetite.
All members of the NRC are independent, Non-Executive Directors. The NRC’s Charter is viewable on the Company’s website
at www.rwc.com.
Remuneration consultants and other advisors
The NRC may seek independent advice from remuneration consultants and other advisors on various remuneration related
matters to assist it in performing its duties and in making recommendations to the Board. Remuneration consultants
and other advisors are required to engage directly with the Chair of the NRC as the first point of contact. No remuneration
recommendations were received from remuneration consultants or other advisors during FY2024.
Principles used to determine the nature and amount of remuneration
Non-Executive Directors’ remuneration
Remuneration of Non-Executive Directors is not linked to Company performance and is comprised solely of cash fees
(including applicable superannuation). This arrangement allows the Board to focus on governance and both short and
long-term strategy free from any potential independence concerns.
The Company’s remuneration policy for Non-Executive Directors aims to attract and retain suitably qualified and experienced
Non-Executive Directors having regard to:
• the level of fees paid to non-executive directors of other peer group companies, including ASX listed companies;
• the size and complexity of RWC’s multi-national operations; and
• the responsibilities and work requirements of Board members.
Please refer to Section C for further details on fees and arrangements for Non-Executive Directors during FY2024.
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Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
Executive KMP remuneration
The Board, through the NRC, is responsible for designing and reviewing remuneration policies which align the remuneration of
executives with the long-term interests of shareholders. Remuneration packages for Executive KMP are set to reflect their duties
and responsibilities and to be competitive in attracting, retaining and motivating appropriately qualified and experienced people
capable of managing the Group’s operations and achieving its business objectives. Remuneration arrangements are regularly
reviewed having regard to various factors, including key performance objectives, an appraisal process and relevant comparable
information.
Remuneration packages for Executive KMP comprise:
• fixed remuneration, represented by a base salary;
• payment of applicable contributions to superannuation or pension funds and other approved benefits;
• eligibility for short-term incentive (“STI”) awards subject to approved criteria being met, with the Board retaining a
discretion to adjust the award outcome based on achievements during a reporting period; and
• ‘equity based’ long-term incentives (“LTI”).
Section B provides further details on the Group’s remuneration framework. Section C provides details of remuneration
outcomes for FY2024.
Minimum Shareholding Policy
The Company has approved a Minimum Shareholding Policy which applies to all KMP and certain other senior executives.
The policy requires KMP and other senior executives to hold and maintain a minimum number of RWC’s ordinary shares
based on:
• Non-Executive Directors – 100% of annual base fees (excluding additional Committee fees);
• CEO – 100% of Total Fixed Remuneration; and
• Other members of the senior executive team – 50% of Total Fixed Remuneration.
The minimum holding is required to be obtained within 5 years from the later of the date the policy commenced (1 July 2021)
or appointment as either a Non-Executive Director or as a member of the senior executive team.
B. Principles of remuneration framework
The Board believes that the remuneration framework should adequately balance the need to attract and retain the best people
to run RWC’s business while ensuring that remuneration is linked clearly to shareholder returns and remains comparable with
appropriate industry and geographical peer groups. A revised remuneration framework commenced with effect from 1 July 2021
with the changes to occur over several years. The transition to the new framework is now complete. It is designed to ensure
RWC remains competitive in the USA, whilst being mindful of the Australian environment where total remuneration quantum is
typically more restrained. This framework applies for less than 10% of the Group’s employees.
RWC mostly competes for talent in the USA market, where remuneration is quite transparent and competitive in our sector and
has established paradigms for the size, shape and description of remuneration packages that are different from usual practice
for ASX listed companies. It is common practice in the USA to have remuneration packages with lower base salaries and higher
at-risk components, including larger equity grants, than is typical in the Australian market. This includes service-based restricted
equity grants which are not subject to performance conditions. In the USA, where the majority of RWC’s senior executives are
based, providing a component of remuneration via service-based restricted equity is market practice.
RWC’s remuneration framework reflects the following:
• Market competitive and capable of being implemented across the Group in a consistent manner;
• Performance based with a target remuneration mix focused on incentive pay linked to operational performance and
shareholder value creation;
• Referenced primarily against a USA peer group to recognise that:
- International expansion has resulted in RWC’s operating activities being less Australian based;
- The majority of senior executives are US based with 75% of senior executive roles based there; and
- The Group currently generates around 70% of external revenue from its Americas business in addition to having major
manufacturing and distribution facilities in North America. Approximately 12% of external revenue was generated in the
APAC region in FY2024;
• Aligned with shareholder expectations;
• Alignment of total remuneration for the CEO and other senior executives with market benchmarks;
• From FY2024, the Target Value will be allocated to Executive KMP as 75% Performance Rights (25% each for TSR Rights,
EPS Rights and ROCE Rights) and 25% service period only Rights. The service period only Rights component is consistent
with remuneration package design for long term incentives awarded in the USA, being the primary peer group market
against which RWC compares itself. The change followed a review by the NRC during FY2023 as summarised in the 2023
Remuneration Report;
• Vesting for LTI awards granted to Executive KMP, Tier 2 executives and Tier 3 executives are subject to performance conditions
and a service period requirement. The performance conditions applicable for FY2022 and FY2023 LTI grants are relative total
shareholder return and earnings per share accretion. From FY2024, a return on capital employed performance condition
has been added. Performance conditions are assessed over a 3 year performance horizon commencing 1 July each year. It is
intended that LTI awards be made annually. Further details are provided below; and
• Alignment with industry practice in the USA, including a focus on “target” remuneration and plan design maximum incentive
values at 200% of target for both STI and LTI.
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Annual Report
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Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
STI Plan
The STI plan is designed to reward eligible participants, including Executive KMP, for achieving fiscal year financial, personal and
strategic goals. STI awards are determined by the Board following satisfaction of specific performance conditions. The STI plan
has the following design features as it applies to Executive KMP:
Nature
Paid in cash. Payment of cash only STI is consistent with USA market practice which for RWC is
the country in which the majority of senior executives are based.
Target
Opportunity for
Executive KMP
CEO: 100% of fixed remuneration in FY2024.
CFO: 55% of fixed remuneration in FY2024.
Entitlement measured against the Performance Metrics and scaling criteria below.
Maximum
Opportunity for
Executive KMP
CEO: 200% of fixed remuneration in FY2024.
CFO: 110% of fixed remuneration in FY2024.
Entitlement measured against the Performance Metrics and scaling criteria below.
Performance
metrics mix
The mix of financial and non-financial criteria to be applied is:
Group EBIT – 70%
Personal KPI goals – 30%
Performance metrics
Financial metric – Earnings Before Interest and Tax (“EBIT”)
For Executive KMP, the relevant portion of the STI award subject to financial performance is
intended to be measured by reference to budgeted Group EBIT (“Budget”). The Board considers
EBIT to be a clearly defined and objective measure which it monitors to measure operational
management and performance. Actual EBIT and Budget are compared on a like for like basis.
The Board considers the disclosure of the Budget to be commercially sensitive information and
that disclosure of this Budget would not be in the Company’s and shareholders’ best interests.
The EBIT metric may be adjusted at the Board’s discretion to exclude the effects of significant
events deemed not appropriate to assess actual employee performance. These significant events
may include:
• Acquisition related charges and other items;
• Restructuring and other charges;
• Non-cash impairments;
• Impacts resulting from material changes in foreign currency exchange rates; and
• Any other significant items deemed appropriate by the Board.
The Board retains a discretion to adjust the award outcome based on achievements during
a reporting period. That discretion was not exercised in relation to FY2024 STI awards for
Executive KMP.
0
80
85
90
95
100
105
110
115
120
125
50
100
150
200
250
Vesting Schedule - Budget
% of Budget Achieved
115% of Budget:
200% Vesting
100% of Budget:
100% Vesting
<90% of Budget:
0% Vesting
% of STI Vesting
The following scale applies for the financial metric:
% of Budget achieved
Payout (% of target)
Less than 90% of Budget
Nil
Between 90% and less than
100% of Budget
Straight line pro-rating from Nil
to Target Opportunity
100% of Budget
100% of Target Opportunity
Above 100% and less than
115% of Budget
Straight line pro-rating from Target
Entitlement to Maximum Opportunity
115% of Budget and greater
100% of Maximum Opportunity
(200% x Target Opportunity)
Personal KPI goals
The relevant portion of the STI award subject to personal KPIs is intended to be measured by
scorecard performance against role specific objectives to be settled with eligible participants
annually. Personal objectives are set to measure the participant’s performance against RWC’s
business strategies and core values. KPIs have been set based on:
Criteria
Examples
ESG and culture
Living our values, culture, health & safety,
diversity, equity and inclusion, ESG
Business leadership
Team management, talent development,
succession planning, training
Personal objectives
specific to role
Business development, product development, cost control,
strategic growth, expansion of RWC’s business activities
Personal KPIs are chosen to encourage the achievement of personal business goals consistent
with the Group’s overall objectives.
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Annual Report
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Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
The following scale applies for the personal KPI goals:
Average personal KPI score
Payout (% of target)
Less than 2
Nil
Between 2 and less than 3.5
Straight line pro-rating from Nil to target
3.5
100% of target
Above 3.5 and less than 5
Straight line pro-rating from target to maximum
5
100% of maximum (200% x target)
0
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
5.0
4.0
4.5
50
100
150
200
250
Vesting Schedule - Personal KPI Score
Personal KPI Score
% of STI Vesting
Personal KPI Score 3.5
100% Vesting
Personal KPI Score <2.0
0% Vesting
Personal KPI Score 5.0
200% Vesting
A combination of financial and non-financial performance criteria were chosen because the Board
believes that there should be a balance between short-term financial measures and more strategic
non-financial measures which, in the medium to longer term, will ultimately drive future growth and
returns for shareholders.
Assessment of
performance
Following the end of the financial year, performance against Budget is assessed by the NRC based
on the Group’s audited financial results.
Performance against personal KPIs is assessed annually as part of the broader performance
review process for Executive KMP. These KPIs are assessed quantitatively against pre-determined
benchmarks, where appropriate.
These methods of assessing performance are chosen as they are, as far as practicable, objective,
measurable and capable of being independently audited.
Clawback or
withholding
Defined criteria are in place to prevent inappropriate benefits being paid. Under the current STI
Plan, the Company can withhold payment of a cash award in certain defined circumstances. For
example, breach of employment conditions, breach of company rules or ongoing employment
related proceedings. In relation to any previous STI awards paid in equity, the Board may determine
that allocated shares may be forfeited and/or require the Executive KMP to pay as a debt any part
of the net proceeds of a sale of awarded shares, cash payment or dividends provided in respect of
an STI award.
LTI Plan
The LTI plan is designed to assist in the motivation, retention and reward of eligible employees and align the interests of
employees with the interests of shareholders by providing an opportunity for eligible employees to receive an equity interest
in the Company. The LTI plan has the following design features:
Nature
Annual grants of Rights. Each Right entitles the participant to one ordinary share in the Company
on vesting. An offer constitutes a long-term incentive component of the participant’s remuneration
from the grant date until the end of the vesting period. Rights are granted at no cost and there will be
no amount payable on vesting.
Eligible participants
Executive KMP and other eligible executives and employees subject to Board approval.
Vesting criteria
applicable for
Executive KMP
Subject to Board approval and the terms of the offer:
• Continuous service period of 3 years; and
• Total Shareholder Return (“TSR”), Earnings per Share (“EPS”) and Return on
Capital Employed (“ROCE”) performance conditions as described below.
Performance conditions do not apply to continuous service period only grants.
TSR and EPS performance conditions apply for LTI grants made from FY2022 onwards.
The ROCE performance condition applies for LTI grants made from FY2024 onwards.
Any Rights which do not vest will immediately lapse.
Number of Rights
to be granted
The number of Rights to be granted is calculated using independently assessed fair values.
The assessment is made as at the commencement of the Performance Period Measurement date
(1 July). For FY2024 grants to Executive KMP:
• The number of TSR Rights = (25% x Target Value) / TSR Rights fair value;
• The number of EPS Rights = (25% x Target Value) / EPS Rights fair value;
• The number of ROCE Rights = (25% x Target Value) / ROCE Rights fair value; and
• The number of Service Period Only Rights = (25% x Target Value) / Service Period Only Rights
fair value.
Target Values for Executive KMP for FY2024 are shown in section (c) below.
Performance
conditions and
assessment
Rights granted to Executive KMP are subject to performance conditions in addition to a continuous
service period. The Board considers these vesting conditions to be an appropriate combination
of stretch financial hurdles directly linked to the Group’s performance and reflecting shareholder
interests. The performance conditions applying for FY2024 grants to Executive KMP are:
• 25% of the Rights (“TSR Rights”) are subject to a relative total shareholder return (“TSR”)
performance condition, which compares the TSR performance of the Company with the TSR
performance of each of the entities in a comparator group over the Performance Measurement
Period (“TSR Hurdle”).
TSR measures the growth in the Company’s share price together with the value of dividends
over the measurement period (assuming that all those dividends are reinvested into new shares)
against the Company’s chosen comparator group, being companies comprising the ASX200
index, excluding mining and energy companies. The comparator group may be adjusted by the
Board or NRC in their reasonable discretion to take into account corporate actions, including but
not limited to takeovers, mergers, de-mergers or de-listings.
Relative TSR was chosen because, in the opinion of the Board, it provides the most direct link to
shareholder return.
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REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
The number of TSR Rights which will be eligible to vest in relation to the TSR Hurdle will be
determined by reference to the following schedule:
Relative TSR Ranking
% TSR Rights eligible to vest
Below 40th percentile
Nil
40th percentile
50%
Above 40th and less than 60th percentile
Pro rata straight line vesting between
40th and 60th percentile
60th percentile
100% (target amount)
Above 60th and less than 80th percentile
Pro rata straight line vesting between
60th and 80th percentile
80th percentile or above
200% (maximum amount)
0
0
10
20
30
40
50
60
70
80
100
90
50
100
150
200
250
Vesting Schedule - TSR Rights
Relative TSR Rank (percentile)
60th percentile:
100% Vesting
80th percentile:
200% Vesting
40th percentile:
50% Vesting
% of TSR Rights Vesting
0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
50
100
150
200
250
Vesting Schedule - EPS Rights
% EPS 3 year CAGR
% of EPS Rights Vesting
15% EPS CAGR:
200% Vesting
8% EPS CAGR:
100% Vesting
4% EPS CAGR:
0% Vesting
25% of the Rights (“EPS Rights”) are subject to an earnings per share compound average growth
rate (“CAGR”) performance condition (“EPS Hurdle”). This condition measures earnings per share
growth over the Performance Measurement Period. It was chosen as a performance condition
because, in the opinion of the Board, it is a measure of the success of Executive KMP and other
participants in generating continued business growth.
Earnings per share is determined by dividing net profit after tax (“NPAT”) into the weighted
average number of issued shares. The EPS CAGR will be measured on a point to point basis over
the Performance Measurement Period.
NPAT may be adjusted at the Board’s discretion to exclude the effects of significant events
deemed not appropriate to assess actual employee performance. These significant events
may include:
- Acquisition related charges and other items;
- Restructuring and other charges;
- Non-cash impairments;
- Impacts resulting from material changes in foreign currency exchange rates;
- Impact of statutory tax rate changes enacted during the performance period; and
- Any other significant items deemed appropriate by the Board.
The number of EPS Rights which will be eligible to vest in relation to the EPS Hurdle will be
determined by reference to the following schedule:
% growth
% EPS Rights eligible to vest
4% (threshold)
Nil
Above 4% and less than 8%
Pro rata straight line vesting from Nil to target
8% (target)
100% (target amount)
Above 8% and less than 15%
Pro rata straight line vesting from target
to maximum
15% (maximum)
200%
25% of the Rights (“ROCE Rights”) are subject to a return on capital employed performance
condition (“ROCE Hurdle”). This condition measures return on capital employed over the
Performance Measurement Period. It was chosen as a performance condition because,
in the opinion of the Board, it is a measure of the success of Executive KMP and other
participants in managing the capital employed in the Group’s business.
The ROCE performance measure is defined as Adjusted EBIT / Capital Employed where:
- Adjusted EBIT = Reported earnings before interest and tax adjusted for approved
exceptional items. (For example: large gains/losses on sales of assets, restructuring
costs, costs incurred to realise synergies, and one-time costs related to mergers and
acquisitions); and
- Capital Employed = Net Intangible Assets (including Goodwill) plus Fixed Assets
(including Right of Use Assets) plus defined Net Working Capital;
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Corporation
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REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
Adjusted EBIT and Capital Employed will both be averaged across each measurement period.
The number of ROCE Rights which will be eligible to vest in relation to the ROCE Hurdle will be
determined by reference to the following schedule:
ROCE for a three year
measurement period
% ROCE Rights eligible to vest
Below 12.5%
Nil
12.5% and less than 13.5%
Pro rata straight line vesting
between 12.5% and Target
13.5% (Target)
100% (Target Amount)
Above 13.5% and less than 15%
Pro rata straight line vesting from
Target to Maximum
15% (Maximum)
200%
0
0.00
12.00
12.50
13.00
13.50
14.00
14.25
14.50
15.00
15.50
16.00
50
100
150
200
250
Vesting Schedule - ROCE Rights
ROCE (%)
% of ROCE Rights Vesting
15% ROCE:
200% Vesting
13.5% ROCE:
100% Vesting
12.5% ROCE:
0% Vesting
Assessment of each performance condition will occur after the end of the Performance
Measurement Period.
These methods of assessing performance are chosen as they are, as far as practicable, objective,
measurable and capable of being independently audited.
Performance
Measurement
Period
Three years commencing 1 July each year. For FY2024 grants, the Performance Measurement
Period commenced on 1 July 2023 and ends on 30 June 2026.
Assessment of
performance
Performance Conditions will be independently assessed following the end of the Performance
Measurement Period.
Voting and
dividend rights
Rights do not carry any voting or dividend rights prior to vesting.
Clawback
Defined criteria are in place to prevent inappropriate benefits being paid.
C. Remuneration outcomes for FY2024
(a) Company performance
The following table shows the financial performance of the Group during the last five financial years.
Key Performance Indicators
FY2024
FY2023
FY2022
FY2021
FY2020
Sales revenue ($m)
1,245.8
1,243.8
1,172.2
1,001.6
779.7
Reported EBITDA ($m)1,6
247.5
276.1
258.9
254.3
146.2
Adjusted EBITDA ($m)2,6
274.6
274.6
268.7
260.7
168.6
Operating profit (“EBIT”) ($m)
187.5
223.5
211.6
212.2
104.6
Net profit before tax ($m)
156.5
191.2
195.8
203.4
91.2
Net profit after tax (“NPAT”) ($m)
110.1
139.7
137.4
141.0
60.0
Adjusted net profit after tax ($m)3,6
146.9
155.7
161.4
158.8
87.4
Share price at beginning of year (A$)
4.10
4.04
5.26
2.94
3.52
Share price at end of year (A$)
4.52
4.10
4.04
5.26
2.94
Financial year distributions declared ($m)4
74.8
75.1
75.1
77.0
37.1
Total distributions declared / NPAT ratio (%)
67.9
53.8
54.7
54.6
61.9
Basic earnings per share (cents)5
14.0
17.8
17.5
18.0
7.6
Adjusted earnings per share (cents)5,6
18.7
19.8
20.6
20.3
11.1
Net sales for FY2024 were $1,245.8 million, up 0.2% on the prior year. FY2024 sales included a partial contribution from Holman
Industries which was acquired on 1 March 2024. Excluding Holman, sales were 2.4% lower than the prior period. Sales in the
Americas were down 1.4% on the prior period, Asia Pacific external sales excluding Holman were down 2.8% and EMEA external
sales were 9.6% lower than the prior period. Volumes in all regions were softer due to weaker remodel and residential new
construction markets, but new product revenues and the acquisition of Holman mitigated these impacts.
Reported EBITDA for the period was $247.5 million, 10% lower than for FY2023. The result for FY2024 included $27.1million in
one-off costs related to the closure of the Supply Smart business in the Americas, restructuring in EMEA and the impairment of
manufacturing assets in Spain, and costs associated with the acquisition of Holman. Excluding these items, Adjusted EBITDA
was $274.6 million, in line with FY2023. Adjusted EBITDA margin of 22.0% was broadly in line with FY2023. Excluding Holman,
Adjusted EBITDA margin improved to 22.3%. The methodology applied in determining adjusting items is applied consistently
from year to year. Proposed adjusting items are presented to the Audit and Risk Committee for review and approval.
Reported NPAT for FY2024 of $110.1 million was 21% lower than FY2023. Adjusting for the one-off items noted above and the
cash tax benefit arising from the amortisation of goodwill, NPAT was $146.9 million, down 5.7% on FY2023.
Total distributions declared for the year ended 30 June 2024 are 9.5 cents per share ($74.8 million) which represents 68% of
Reported NPAT and 51% of Adjusted NPAT (FY2023 – 9.5 cents per share, $75.1 million). The share price increased 10% year on
year (from A$4.10 at 30 June 2023 to A$4.52 at 30 June 2024).
1 EBITDA means earnings before interest, tax, depreciation and amortisation. For FY2024, Reported EBITDA reconciles as NPAT ($110.1m) before interest ($30.9m),
tax ($46.4m) depreciation and amortisation ($60.1).
2 Adjusted EBITDA for FY2024 is Reported EBITDA ($247.5m) before net costs associated with closure of Supply Smart ($11.0m), costs and product related costs associated
with the Holman acquisition ($7.4m), restructuring and impairment costs in EMEA and APAC ($8.7m). Adjusted EBITDA for FY2023 is Reported EBITDA ($276.1m) excluding
the profit on sale of surplus property ($15.0m) and before restructuring costs, costs incurred to achieve EZ-Flo synergies and one-off product related costs ($13.5 m). Adjusted
EBITDA for FY2022 is Reported EBITDA ($258.9m) before net EZ-Flo and LCL acquisition costs, gain on sale of Streamlabs and debt financing costs expensed ($9.9 m).
Adjusted EBITDA for FY2021 is Reported EBITDA ($254.3m) before restructuring and asset impairment charges ($6.4m). Adjusted EBITDA for FY2020 is Reported EBITDA
($146.2m) before restructuring and asset impairment charges ($22.4m).
3 Adjusted Net profit after tax reflects the reconciliation items (tax effected) which determine Adjusted EBITDA for each reporting period as applicable. Adjusted NPAT for
FY2024 is NPAT ($110.1m) adjusted for the reconciliation items (tax effected) which determine Adjusted EBITDA ($21.3m net) and other specific tax related adjustments
($15.5m).
4 Financial year distributions comprise interim and final dividends declared plus, from FY2024, an on-market share buy-back component following a change to the way that
total distributions are to be made as announced in February 2024. Further explanation is contained in the Directors’ Report.
5 Based on weighted average number of shares for the reporting period.
6 EBITDA, Adjusted EBITDA, Adjusted net profit after tax and Adjusted earnings per share are non-IFRS measures used by RWC to assess operating performance and enhance
comparability from period to period. These measures have not been subject to audit or review.
55
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REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
(b) Non-Executive Directors’ fees and arrangements
The Board, in accordance with the terms of the Company’s Constitution, determines the remuneration to which each Non-
Executive Director is entitled for services as a Director. The aggregate amount provided to all Non-Executive Directors for
their services as Directors in any financial year must not exceed the amount fixed by the Company at a general meeting of
shareholders. This maximum aggregate amount is presently fixed at A$2,000,000 as approved by shareholders at the 2022
Annual General Meeting.
Approved Non-Executive Directors’ fees for FY2024 were:
Role
Annual
base fees
Additional fees for
Committee Chair
Total
annual fees
Chair
A$380,000
–
A$380,000
Chair of a Board Committee
A$180,000
A$30,000
A$210,000
Non-Executive Directors (other than Committee Chairs)
A$180,000
–
A$180,000
All fees include applicable superannuation.
Details of fees paid or payable to each Non-Executive Director for FY2024 are shown in section (h). Fees are paid in cash only.
Committee Chairs receive an additional fee. No additional fees are paid for only being a member of a committee.
Fee arrangements were the same in FY2024 and FY2023.
The current fee arrangements will continue to apply in FY2025, subject to any further review and recommendation by the
NRC which is accepted by the Board.
The Company’s Constitution provides that any Non–Executive Director who performs extra services, makes any special exertions
for the benefit of the Company or who otherwise performs services which, in the opinion of the Board, are outside the scope of
the ordinary duties of a Non-Executive Director, may, as determined by the Board, be remunerated for those services out of funds
of the Company. Any such amounts paid will not form part of the aggregate permitted maximum remuneration amount. No such
fees were paid or are payable for FY2024.
Non-Executive Directors may also be reimbursed for travel and other expenses incurred in attending to the Company’s affairs,
including attending and returning from general meetings of the Company or meetings of the Board or committees of the Board.
There are no retirement benefit schemes for Non-Executive Directors other than applicable statutory superannuation contributions.
c) Summary of statutory remuneration outcomes for Executive KMP for FY2024
The remuneration outcomes for Executive KMP for FY2023 reflect the framework outlined above and include:
Fixed remuneration
CEO: US$1,100,000. The CEO’s fixed remuneration reduced by around 20% over the period from FY2022 to FY2024 as part of the
transition to the new framework.
CFO: US$600,000
STI award
CEO: US$1,326,729
CFO: US$413,199
The key criteria for the FY2024 STI award are set out in section B. Details of the assessment of the FY2024 STI awards are set out
in section (d).
LTI awards
For FY2024, the Company granted:
• 1,430,987 Rights (target opportunity) to the CEO. The Target Value is $3,200,000. The maximum opportunity is 2,540,990
Rights. Shareholder approval was obtained at the 2023 Annual General Meeting (in compliance with Listing Rule 10.14); and
• 402,466 Rights (target opportunity) to the CFO. The Target Value is $900,000. The maximum opportunity is 714,655 Rights.
Key criteria for these awards are set out in section B.
Target Value for the CEO’s FY2024 LTI grant is as specified in his employment agreement. Target Value for the CFO’s FY2024 LTI
grant is set at 150% of fixed remuneration as approved by the Board.
Details of LTI awards granted to Executive KMP which vested during FY2024 are shown in (f) below.
No other Rights awarded to Executive KMP vested or were cancelled or forfeited during FY2024 or through to the date of this report.
The remuneration mix for Executive KMP for FY2024, based on statutory remuneration as set out in section (h), was:
Senior Executive
Fixed remuneration
and benefits (%)
STI
(%)
LTI
(%)
Cash
(%)
Non-cash
(%)
“At Risk”
remuneration (%)
Heath Sharp
34
37
29
71
29
66
Andrew Johnson
44
28
28
72
28
56
(d) STI awards to Executive KMP for FY2024
STI for Executive KMP is designed to be evaluated based on the achievement of agreed key performance measures. Following
the end of the financial year, the NRC considered whether or not STI awards should be made to Executive KMP. The NRC
approved the STI award to the CFO and made a recommendation to the Board for the CEO’s STI award. The recommendation
was accepted by the Board.
The mix of financial and non-financial criteria to be applied is:
Group EBIT – 70%
Personal KPI goals – 30%
Financial criteria
As mentioned in Section B, for Executive KMP the relevant portion of the STI award subject to financial performance is intended
to be measured by reference to a comparison of actual EBIT and budgeted EBIT (“Budget”) on a like for like basis. Budget details
are not disclosed as the Board considers this information to be commercially sensitive. The minimum target for STI entitlement
(90% x Budget) was achieved for FY2024 meaning an STI award for financial criteria was made to Executive KMP. Summary
comments on the Group’s financial performance are provided in section (a) above.
Personal KPIs criteria
Achievement of Personal KPIs was measured against the criteria listed in Section B describing the STI Plan.
The CEO’s Personal KPIs covered areas including safety management, progress on reducing greenhouse gas emissions
towards RWC’s stated targets, progress on improving diversity in the business, talent management and succession, successful
implementation of the PEX-a product program in the Americas region, and strategy development/implementation. The CEO
achieved an average personal KPI score of 4.10 out of 5.0.
The Group has made significant progress in health and safety management during the reporting period. Despite the significant
progress made, incidents did occur where people suffered injury. This is not our desired outcome and the CEO’s personal KPI
score was reduced accordingly.
The CFO’s KPIs covered areas including ESG and culture targets, gender diversity improvement, talent management and
succession, financial related performance targets and objectives. The CFO achieved an average personal KPI score of 4.33
out of 5.0.
The Company’s 2024 annual report, corporate governance statement and ESG report provide information on the progress and
outcomes on several of the KPI objectives listed above.
57
56
Remuneration Report
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
(f) Share Rights
The Board has approved that nominated, eligible executives and employees, including Executive KMP, be invited to participate
in the Plan as a means of attracting, retaining and motivating key employees in the Group. Participants are granted rights to be
awarded fully paid ordinary shares in the Company (“Rights”) in accordance with the rules of the Plan and subject to the offer
terms (“Offer”). Each Right entitles the participant to one ordinary share in the Company on vesting. An Offer constitutes a long-
term incentive component of the participant’s remuneration from the grant date until the end of the vesting period. Rights are
granted at no cost and there will be no amount payable on vesting. There are no voting or dividend rights attaching to Rights prior
to vesting.
The number of unvested Rights which had been granted by the Company to all participants at 30 June 2024 was 9,805,684
(30 June 2023 – 8,197,016).
The opening and closing balances of all unvested Rights granted are reconciled for the reporting period as follows:
Number
of Rights
Granted and unvested at 30 June 2023
8,197,016
Granted during FY2024
4,847,211
Vested during FY2024
(2,537,279)
Forfeited, Cancelled or Lapsed during FY2024
(701,264)
Unvested at 30 June 2024
9,805,684
Subsequent to 30 June 2024 through to the date of this report:
• No additional Rights have vested or been granted;
• 40,026 Rights have vested; and
• A further 23,321 Rights have lapsed or been forfeited or cancelled.
Details of Rights granted to Executive KMP, including vested or forfeited Rights, are shown below.
Vesting conditions for granted Rights include continuous service periods ranging between two and five years.
Other key terms of the Rights grants
Cessation of employment
Unless the Board determines otherwise, if a participant ceases employment with the Group prior to the Vesting Date and any of
the following has occurred, then a pro rata portion of the unvested Rights may remain on foot and vest in the ordinary course as
though the participant had not ceased employment:
• The participant’s employment is terminated by RWC without cause; or
• The participant terminates employment for a defined good reason.
The remainder of the Rights will lapse.
Change of control
In summary, in the event of a takeover bid or other transaction, event or state of affairs that in the Board’s opinion is likely to result
in a change in control of the Company or should otherwise be treated as a change of control event in accordance with rule 9 of
the Company’s Equity Incentive Plan Rules, the Board has a discretion to determine how the Rights should be treated for the
purpose of vesting.
Rights granted to Executive KMP
Rights granted to Executive KMP contain a continuous service period vesting condition and performance vesting conditions
except as indicated below. Each Right entitles the participant to one ordinary share in the Company on vesting. Rights are granted
at no cost and there will be no amount payable on vesting. There are no voting or dividend rights attaching to Rights prior to
vesting. Rights will vest at the end of the continuous service period (being the Vesting Date) subject to the terms of the award,
including achievement of any performance conditions.
Total STI award
The total STI award to Executive KMP for FY2024 as a proportion of Target STI is:
CEO: 120.6%
CFO: 125.2%
The STI award is payable in cash for the reasons explained in section B.
(e) Vested LTI options grants
The CEO was awarded 4,000,000 options (“CEO Options”) in FY2016. The CEO Options vested on 30 June 2022 after testing of
all performance and service conditions. The CEO is presently entitled to exercise the CEO Options and acquire ordinary shares in
the Company on a 1 for 1 basis subject to payment of the exercise price. The CEO Options were granted for nil consideration as
they formed part of the CEO’s remuneration. The CEO may exercise the vested CEO Options by 30 June 2031. After 30 June 2031,
any unexercised CEO Options will lapse. No CEO Options have been exercised to date.
Additional information:
• Exercise price is A$2.32 per CEO Option.
• CEO Options do not carry any voting or dividend rights prior to vesting and exercise.
• Cessation of employment:
- Where the CEO is terminated for cause, vested but unexercised CEO Options will lapse unless the
Board determines otherwise; and
- Where the CEO ceases employment for any other reason, vested but unexercised CEO Options will remain on
foot for the original exercise period.
• Change of Control:
- Vested CEO Options will be exercisable for a period notified to the CEO by the Board. Vested CEO Options will lapse
after the end of that period.
• Clawback: Defined criteria are in place to prevent inappropriate benefits being paid. In such circumstances,
the Board may determine that:
- vested but unexercised options will lapse;
- shares allocated upon exercise of options will be forfeited; and/or
- require the CEO to pay as a debt any part of the net proceeds of a sale of awarded shares, cash payment or dividends
provided in respect of an award made under the Plan.
No other options have been granted to any Executive KMP.
59
58
Remuneration Report
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
The number of unvested Rights granted to Executive KMP at 30 June 2023 are shown in the following table.
Executive KMP
Grant date
Vesting date
Unvested
Rights at
30 June
2023
Granted
during
FY2024
Vested
during
FY2024
Number
of Rights
lapsed
during
FY2024
Unvested
Rights at
30 June
2024
Fair
value
per Right
at Grant
Date2
Heath Sharp
30 October 2018
30 October 2023
611,2011
–
(611,201)
–
–
A$4.29
1 October 2021 30 September 20249
140,310
–
–
–
140,310
A$5.433
1 October 2021 30 September 20249
175,680
–
–
–
175,680
A$4.614
1 October 2022 30 September 2025
225,994
–
–
–
225,994
A$4.123
1 October 2022 30 September 2025
417,670
–
–
–
417,670
A$3.104
1 October 2023 30 September 2026
–
279,181
–
–
279,181
A$3.643
1 October 2023 30 September 2026
–
412,536
–
–
412,536
A$3.094
1 October 2023 30 September 2026
–
418,286
–
–
418,286
A$3.095
1 October 2023 30 September 2026
–
320,984
–
–
320,984
A$3.096
1,570,855
1,430,987
(611,201)
–
2,390,641
Andrew Johnson
27 August 2018
27 August 20237
86,400
–
(86,400)
–
–
A$5.17
1 January 2021
1 January 20248
331,263
–
(331,263)
–
–
A$2.99
1 October 2021 30 September 20249
44,543
–
–
–
44,543
A$5.433
1 October 2021 30 September 20249
55,772
–
–
–
55,772
A$4.614
1 October 2022 30 September 2025
88,050
–
–
–
88,050
A$4.123
1 October 2022 30 September 2025
162,729
–
–
–
162,729
A$3.104
1 October 2023 30 September 2026
–
78,520
–
–
78,520
A$4.203
1 October 2023 30 September 2026
–
116,026
–
–
116,026
A$3.434
1 October 2023 30 September 2026
–
117,643
–
–
117,643
A$3.435
1 October 2023 30 September 2026
–
90,277
–
–
90,277
A$3.436
768,757
402,466
(417,663)
–
753,560
2,339,612
1,833,453
1,028,864
–
3,144,201
No Rights granted to Executive KMP were forfeited, cancelled or lapsed during FY2024 or subsequent to the date of this report.
Shares purchased to meet vesting obligations
The Company has established a subsidiary, Reliance Employee Share Investments Pty Ltd (“Trustee”), to act as trustee of the
Reliance Employee Share Investments Trust. The Trustee will acquire RWC shares on-market on behalf of the Trust to meet any
obligations to deliver shares to a participant in the Plan where the applicable vesting conditions are met. The Trustee is also entitled
to participate on behalf of the Trust in certain equity raisings undertaken by the Company.
The movement in the number of shares held during the reporting period is:
Number
Shares held at 30 June 2023
5,435,049
Shares allocated and transferred to participants
(1,973,466)
Shares held at 30 June 2024
3,461,583
No shares were acquired on behalf of the Trust during FY2024. Vesting obligations will be met in accordance with the terms of the
Plan rules.
(g) Share match plan
The Group has a share match plan to encourage employees to own shares in the Company. Eligible employees can acquire up to
A$5,000 of shares in RWC per plan year from post tax income with contributions made via a regular salary deduction (“Purchased
Shares”). The Company will match the shares acquired on a 1:2 basis up to a cap A$2,500 of Purchased Shares subject to the terms
of the Share Match Plan (“Matching Rights”). There is a minimum holding period for Purchased Shares of 2 years and a continuous
service obligation for Matching Rights to convert into shares on a 1:1 basis (“Matched Shares”). There are no performance conditions.
Participants receive dividends and have voting rights on their Purchased Shares. Matching Rights have no voting or dividend
entitlements prior to vesting. The total number of Matching Rights granted at 30 June 2024 was 116,000.
Mr. Sharp is not a participant in this plan. Mr. Johnson ceased participating in this plan during FY2022. Mr. Johnson holds 1,213 Shares
from when he was a participant in this plan.
(h) KMP remuneration
Details of the remuneration of each member of KMP are set out below. The table includes the statutory disclosures required under
the Corporations Act and is in accordance with Australian Accounting Standards. All figures are in US dollars and relate to the period
of the year in which the person was a KMP.
The increase in FY2024 remuneration compared with FY2023 for Executive KMP reflects:
1 STI for FY2024 includes an award for achievement of Financial Criteria. There was no award for Financial Criteria in FY2023; and
2 LTI grants for FY2024 increased substantially following the review undertaken by the Nomination and Remuneration Committee
in FY2023. This increase flows through to the associated accounting expense.
1 Original grant was 987,800 Rights. 376,599 Rights lapsed in FY2021 after assessment of applicable performance conditions at the end of the relevant
Performance Measurement Period (30 June 2020).
2 Based on an independent valuation which used Black Scholes and/or Monte Carlo models and complies with the requirements of AASB2.
3 TSR Rights. Performance conditions are set out in section B.
4 EPS Rights. Performance conditions are set out in section B.
5 ROCE Rights. Performance conditions are set out in section B.
6 Service period only Rights.
7 Only a continuous service period vesting condition applies to these grants which were made prior to Mr. Johnson becoming a member of KMP.
8 Vested after testing of the relative TSR performance condition and meeting the continuous service period vesting condition.
9 Performance conditions tested subsequent to 30 June 2024. rTSR ranking for the performance period at the 40.5th percentile meaning 50.6% of TSR
Rights remain eligible to vest. No EPS Rights remain eligible to vest.
61
60
Remuneration Report
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
Short term
Post-employment
Other long-term
statutory benefits
Share-based
payments1
Total
US$
Cash
salary
& fees
US$
Cash STI
award
US$
Non-
monetary
benefits
US$
Other
short-term
benefits
US$
Superannuation
or pension plan
benefits
US$
Other post
employment
US$
Termination
benefits
US$
Long
service leave
US$
Share Rights
US$
Non-Executive Directors
Christine Bartlett
FY2024
125,657
–
–
–
13,822
–
–
–
–
139,479
FY2023
126,756
–
–
–
13,309
–
–
–
–
140,065
Russell Chenu
FY2024
113,690
–
–
–
12,506
–
–
–
–
126,196
FY2023
126,756
–
–
–
13,309
–
–
–
–
140,065
Stuart Crosby
FY2024
234,193
–
–
–
18,198
–
–
–
–
252,391
FY2023
236,582
–
–
–
16,869
–
–
–
–
253,451
Darlene Knight
FY2024
139,479
–
–
–
–
–
–
–
–
139,479
FY2023
140,065
–
–
–
–
–
–
–
–
140,065
Sharon McCrohan
FY2024
125,657
–
–
–
13,822
–
–
–
–
139,479
FY2023
126,756
–
–
–
13,309
–
–
–
–
140,065
Ian Rowden
FY2024
119,554
–
–
–
–
–
–
–
–
119,554
FY2023
120,056
–
–
–
–
–
–
–
–
120,056
Brad Soller
FY2024
119,673
–
–
–
13,164
–
–
–
–
132,837
FY2023
72,432
–
–
–
7,605
–
–
–
–
80,037
Executive KMP
Heath Sharp
FY2024
1,100,000
1,326,729
–
84,573
13,200
–
–
–
1,035,636
3,560,138
FY2023
1,175,000
508,305
–
83,935
13,200
–
–
–
755,265
2,535,705
Andrew Johnson
FY2024
600,000
413,199
–
31,006
13,200
–
–
–
408,898
1,466,303
FY2023
600,000
154,000
–
45,332
13,200
–
–
–
435,592
1,248,124
Total
FY2024
2,677,903
1,739,928
–
115,579
97,912
–
–
–
1,444,534
6,075,856
FY2023
2,724,403
662,305
–
129,267
90,801
–
–
–
1,190,857
4,797,633
1 Reflects the accounting expense for the reporting period based on the fair value at grant dates.
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
(i) Actual remuneration received by Executive KMP in FY2024
Details of actual remuneration received by each Executive KMP for FY2024 are shown in the following table. This information is
provided as a voluntary disclosure to show the actual FY2024 remuneration and benefits for Executive KMP. This table differs from
the statutory remuneration table shown in section (h) which is prepared to comply with the requirements of Australian Accounting
Standards and relevant legislation.
Executive KMP
Cash
salary
& fees
US$
FY2024
STI award
US$
Other
short term
benefits
US$
Superannuation
or pension
plan benefits
US$
Vested LTI
awards1
US$
Total
US$
Heath Sharp
1,100,000
1,326,729
84,573
13,200
1,335,025
3,859,527
Andrew Johnson
600,000
413,199
31,006
13,200
1,224,993
2,282,398
D. FY2025 NRC objectives and KMP remuneration arrangements
(j) NRC’s objectives for FY2025
No further significant changes to the remuneration framework are expected during FY2025. The NRC expects its primary focus
during FY2025 will be on:
• continuing to review remuneration arrangements of executives, including Executive KMP, to confirm that market competitive
remuneration packages are in place to attract and retain high calibre executives;
• confirming ‘at risk’ variable remuneration arrangements remain appropriately aligned with business strategies and outcomes;
• considering the process for measuring achievement of STI objectives, including if a balanced scorecard approach should
be introduced;
• reviewing performance criteria for LTI grants to confirm they remain appropriate;
• overseeing the processes to manage and administer the STI and LTI plans; and
• monitoring succession planning and talent management.
(k) Executive KMP remuneration for FY2025
The remuneration arrangements for Executive KMP for FY2025 include:
Fixed remuneration
CEO: US$ 1,100,000
CFO: US$ 600,000
There has been no change in fixed remuneration for Executive KMP for FY2025.
STI opportunity
The key criteria for the FY2025 STI opportunity are set out in section B. There is no change to STI criteria for FY2025.
Any STI awards will be paid in cash.
LTI award for FY2025
The Company intends offering a FY2025 LTI award to both the CEO and CFO. The Target Values are:
CEO: $3,200,000
CFO: $900,000
The Target Values remain the same as for FY2024 grants.
The award to the CEO will be subject to shareholder approval. Details of the proposed award to the CEO will be advised in the
Notice of Meeting for the 2024 Annual General Meeting.
The Performance Measurement Period will be for the three years commencing on 1 July 2024. Key conditions are summarised in
section B and above.
63
62
1 Vested LTI awards reflects Share Rights which vested during FY2024. Values calculated using market value at the various vesting dates. Details of Share Rights are shown in section (f).
Remuneration Report
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
CEO
Base
LTI
STI
20%
20%
60%
CFO
Base
LTI
STI
33%
18%
49%
Remuneration mix for Executive KMP
The intended remuneration mix by the end of FY2025 for each Executive KMP for on-target performance is:
E. Other disclosures
(l) Service agreements with Executive KMP
Employment and remuneration arrangements of the Executive KMP are formalised in written service agreements between the
executive and a member of the Group. The key terms and conditions of the current employment arrangements for Executive
KMP are set out below, excluding remuneration arrangements which are presented and explained in other sections of this
Remuneration Report.
Heath Sharp, Managing Director and Chief Executive Officer
Term
Mr. Sharp is employed by Reliance Worldwide Corporation (a company in the Group which carries
on operations in the USA). The service agreement has an initial term of five years from 1 July 2021.
Thereafter, automatically extended for one year rolling terms unless and until either party gives
notice of an intention not to renew. The employer shall give any such non-renewal notice at least
90 days prior to the end of the then applicable term. Mr. Sharp shall give any such non-renewal
notice at least 12 months prior to the end of the then applicable term.
Notice
Termination by the employer
• Mr. Sharp’s employment may be terminated by the employer without cause
(excluding due to death or disability) upon giving 90 days’ written notice; and
• may be terminated by the employer for cause at any time.
Termination by Heath Sharp
• Mr. Sharp may terminate his employment with good reason upon giving 90 days written notice
and allowing a cure period.
• Where he terminates without good reason, 12 months written notice is required to be provided.
Termination payments1
• Where Mr. Sharp’s employment is terminated by the employer without cause or by Mr. Sharp
with good reason, he is entitled to 12 months’ severance pay (in addition to any notice period)
plus accrued entitlements (comprising accrued but unpaid annual base salary, accrued
unused vacation pay and unreimbursed properly incurred business expenses) plus he remains
eligible for a pro rata bonus for the days he was employed during the applicable fiscal year and
payment of certain health insurance premiums.
• Where his employment is terminated due to death or disability, Mr. Sharp is entitled to
accrued entitlements, remains eligible for a pro rata bonus for the days he was employed
during the applicable fiscal year and to a continuation of applicable welfare and health
benefits entitlements.
• Where the employment agreement is terminated by the employer for cause or by
Mr. Sharp without good reason, then the employer shall have no further payment obligations
other than for accrued entitlements and continuation of applicable welfare and health
benefits entitlements.
• Where Mr. Sharp provides notice of non-renewal, then no severance amount will be payable.
Restraint
Mr. Sharp’s employment agreement contains a restraint of trade, which operates for a maximum
period of 24 months following cessation of employment.
1 The Corporations Act restricts the termination benefits that can be provided to KMP on cessation of their employment, unless shareholder approval is obtained.
The shareholders of the Company and of Reliance Worldwide Corporation, as applicable, have approved the giving of benefits to all current and future members
of KMP in connection with that person ceasing to hold a managerial or executive office (as defined in section 200AA of the Corporations Act) in the Company or
a related body corporate.
Remuneration Report
65
64
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
REMUNERATION REPORT
For the year ended 30 June 2024 (audited)
1 The Corporations Act restricts the termination benefits that can be provided to KMP on cessation of their employment, unless shareholder approval is obtained.
The shareholders of the Company and of Reliance Worldwide Corporation, as applicable, have approved the giving of benefits to all current and future members
of KMP in connection with that person ceasing to hold a managerial or executive office (as defined in section 200AA of the Corporations Act) in the Company or
a related body corporate.
Andrew Johnson, Chief Financial Officer
Term
Mr. Johnson is employed by Reliance Worldwide Corporation (a company in the Group which
carries on operations in the USA). The service agreement contains no fixed term.
Notice
Termination by the employer
• Mr. Johnson’s employment may be terminated by the employer without cause
(excluding due to death or disability) upon giving 3 months written notice; and
• may be terminated by the employer for cause at any time.
Termination by Andrew Johnson
• Mr. Johnson may terminate his employment with good reason upon giving 3 months written
notice and allowing a cure period.
• Where he terminates without good reason, 3 months written notice is required to be provided.
Termination payments1
• Where Mr. Johnson’s employment is terminated by the employer without cause or by
Mr. Johnson with good reason, he is entitled to 9 months’ severance pay (in addition to any
notice period) plus accrued entitlements (comprising accrued but unpaid annual base salary,
accrued unused vacation pay and unreimbursed properly incurred business expenses) plus he
remains eligible for a pro rata bonus for the days he was employed during the applicable fiscal
year and payment of certain health insurance premiums.
• Where his employment is terminated due to death or disability, Mr. Johnson is entitled to
accrued entitlements, remains eligible for a pro rata bonus for the days he was employed
during the applicable fiscal year and to a continuation of applicable welfare and health
benefits entitlements.
• Where the employment agreement is terminated by the employer for cause or by
Mr. Johnson without good reason, then the employer shall have no further payment obligations
other than for accrued entitlements and continuation of applicable welfare and health
benefits entitlements.
Restraint
Mr. Johnson’s employment agreement contains non-compete and non-solicitation clauses
which operate for a period of 12 months following his ceasing to work for RWC.
1 Includes the purchase (sale) of shares during the reporting period and transfers in (out) upon becoming or ceasing to be a member of KMP. For Executive KMP,
includes shares received upon vesting of Rights and Matching Rights.
2 Includes 20,000 shares received in April 2016 under specific arrangements for Non-Executive Directors in connection with the IPO, as disclosed in the Prospectus.
(m) KMP shareholdings
Movements in the number of shares held by KMP directly, indirectly (through personally related entities) or nominally
during FY2024 are set out below.
Name
Held at 1 July 2023
Net change1
Held at 30 June 2024
Christine Bartlett
50,000
–
50,000
Russell Chenu2
170,217
15,000
185,217
Stuart Crosby2
201,756
–
201,756
Darlene Knight
37,000
13,000
50,000
Sharon McCrohan
52,000
–
52,000
Ian Rowden
35,000
15,000
50,000
Heath Sharp
1,423,397
335,417
1,758,814
Brad Soller
15,000
10,000
25,000
Andrew Johnson
171,236
229,105
400,341
(n) Material contracts with related parties
There were no material contracts between a KMP or a related party and the Company or any of its subsidiaries entered into
during the reporting period. Key terms and conditions of employment agreements with Executive KMP are summarised
throughout this report.
(o) Loans with KMP
No KMP has entered into a loan made, guaranteed or secured, directly or indirectly, with or by the Company or any of its
subsidiaries during the reporting period.
Remuneration Report
67
66
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2024
Note
2024
US$000
2023
US$000
Revenue from sale of goods
4
1,245,754
1,243,802
Cost of sales
(756,992)
(765,596)
Gross profit
488,762
478,206
Other income
7
6,041
18,991
Product development expenses
(12,988)
(11,846)
Selling, warehousing and marketing expenses
(160,610)
(151,117)
Administration expenses
(116,548)
(107,121)
Other expenses
8
(17,182)
(3,611)
Operating profit
187,475
223,502
Finance income
6
626
346
Finance costs
6
(31,568)
(32,688)
Net finance costs
(30,942)
(32,342)
Profit before tax
156,533
191,160
Income tax expense
9
(46,388)
(51,510)
Profit for the period attributable to the owners of the Company
110,145
139,650
Other comprehensive profit
Items that may be classified to profit or loss:
Foreign currency translation differences
17
(4,147)
33,592
Total comprehensive profit for the period attributable to the
owners of the Company
105,998
173,242
US Cents
Earnings per share
Basic earnings per share attributable to ordinary equity holders
5
14.0
17.8
Diluted earnings per share attributable to ordinary equity holders
5
14.0
17.7
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Reliance Worldwide Corporation Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Reliance Worldwide
Corporation Limited for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Vicky Carlson
Partner
Melbourne
20 August 2024
Financial Statements
69
68
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2024
Note
2024
US$000
2023
US$000
Assets
Current assets
Cash and cash equivalents
14
19,915
16,617
Trade and other receivables
10
238,812
246,044
Inventories
10
292,780
289,399
Current tax assets
20,289
25,302
Other current assets
10,083
11,776
Total current assets
581,879
589,138
Non-current assets
Property, plant and equipment
11
240,120
231,138
Right-of-use assets
12
109,888
95,561
Deferred tax assets
9
57,815
31,695
Goodwill
13
818,826
780,711
Other intangible assets
13
331,859
326,968
Other non-current assets
4,112
3,374
Total non-current assets
1,562,620
1,469,447
Total assets
2,144,499
2,058,585
Liabilities
Current liabilities
Trade and other payables
10
179,099
166,541
Current tax liabilities
3,158
4,110
Employee benefits
18
6,738
8,319
Lease liabilities
15
20,769
15,459
Total current liabilities
209,764
194,429
Non-current liabilities
Borrowings
14
438,327
450,165
Deferred tax liabilities
9
125,763
86,734
Employee benefits
18
4,567
4,503
Lease liabilities
15
101,710
91,396
Total non-current liabilities
670,367
632,798
Total liabilities
880,131
827,227
Net assets
1,264,368
1,231,358
Equity
Share capital
16
1,737,277
1,742,078
Reserves
17
(884,034)
(868,663)
Retained earnings
411,125
357,943
Total equity
1,264,368
1,231,358
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Note
Share
capital
US$000
Foreign
currency
translation
reserve
US$000
Share-
based
payment
reserve
US$000
Other
reserves
US$000
Retained
earnings
US$000
Total
equity
US$000
Balance at 1 July 2022
1,738,846
(71,750)
18,195 (848,734)
294,026
1,130,583
Profit for the period
–
–
–
–
139,650
139,650
Foreign currency
translation differences
17
–
33,592
–
–
–
33,592
Total comprehensive income
–
33,592
–
–
139,650
173,242
Transactions with
owners of the Company
Treasury shares
16
3,232
–
–
–
–
3,232
Share-based payments
19
–
–
34
–
(1,185)
(1,151)
Dividends paid
–
–
–
–
(74,548)
(74,548)
Total transactions with
owners of the Company
3,232
–
34
–
(75,733)
(72,467)
Balance at 30 June 2023
1,742,078
(38,158)
18,229 (848,734)
357,943
1,231,358
Balance at 1 July 2023
1,742,078
(38,158)
18,229 (848,734)
357,943
1,231,358
Profit for the period
–
–
–
–
110,145
110,145
Foreign currency
translation reserve
17
–
(4,147)
–
–
–
(4,147)
Total comprehensive income
–
(4,147)
–
–
110,145
105,998
Transactions with
owners of the Company
Treasury shares
16
4,700
–
–
–
–
4,700
Shares cancelled - on market buy-back
(9,501)
–
–
(8,502)
–
(18,003)
Share based payments
–
–
(2,722)
–
–
(2,722)
Dividends paid
–
–
–
–
(56,963)
(56,963)
Total transactions with
owners of the Company
(4,801)
–
(2,722)
(8,502)
(56,963)
(72,988)
Balance at 30 June 2024
1,737,277
(42,305)
15,507
(857,236)
411,125 1,264,368
Financial Statements
71
70
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
Note
2024
US$000
2023
US$000
Cash flows from operating activities
Receipts from customers
1,405,068
1,371,929
Payments to suppliers and employees and for customer rebates
(1,090,859)
(1,079,269)
Cash generated from operations
314,209
292,660
Income taxes paid
(39,802)
(42,400)
Net cash inflow from operating activities
274,407
250,260
Cash flows from investing activities
Payments for purchase of property, plant and equipment
11
(39,328)
(35,652)
Proceeds from sale of property, plant and equipment
2,850
28,004
Payments for intellectual property and other intangible assets acquired
13
(1,985)
(6,856)
Payment for acquisition of subsidiaries, net of cash acquired
3
(101,693)
–
Net cash outflow from investing activities
(140,156)
(14,504)
Cash flows from financing activities
Purchase of treasury shares
–
(1,320)
Payments for share buy-back
16
(17,794)
–
Proceeds from borrowings
14
169,973
75,092
Repayment of borrowings
14
(183,608)
(202,680)
Interest received
626
346
Interest paid
14
(26,555)
(28,303)
Dividends paid
(56,963)
(74,548)
Lease payments
14
(17,171)
(15,139)
Net cash outflow from financing activities
(131,492)
(246,552)
Net change in cash and cash equivalents
2,759
(10,796)
Cash and cash equivalents at 1 July
16,617
27,679
Effects of movements in exchange rates on cash held
539
(266)
Cash and cash equivalents at 30 June
19,915
16,617
Represented by:
Cash at bank
19,915
16,617
Cash and cash equivalents at the end of the year
14
19,915
16,617
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Basis of preparation
(a) Reporting entity
Reliance Worldwide Corporation Limited (the “Company” or “Reliance”) is a limited liability company which was incorporated
on 19 February 2016 and is domiciled in Australia. The consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the “Group”). The Company’s registered office is at 28 Chapman Place, Eagle Farm,
Queensland 4009, Australia.
The principal activities of the Group are the design, manufacture and supply of high quality, reliable and premium branded
water flow, control and monitoring products and solutions for the plumbing and heating industry.
(b) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) and
interpretations adopted by the International Accounting Standards Board (IASB).
The Company is a for-profit entity. The consolidated financial statements were authorised for issue by the Board of Directors on
20 August 2024.
(c) Basis of preparation
These consolidated financial statements:
• comprise the Company and its subsidiaries, together referred to as the “Group”, for the reporting period ended 30 June 2024;
• have been prepared on a going concern basis using historical cost conventions, having regard to the financial performance of
the Group and consideration of the financial position at 30 June 2024;
• are presented in US dollars and in accordance with the Australian Securities and Investments Commission Corporations
(Rounding in Financial / Directors’ Reports) Instrument 2016/191, values are rounded to the nearest thousand dollars, unless
otherwise stated;
• adopt all new and amended AASBs and Interpretations issued by the AASB that are relevant to the operations of the
Group and effective for reporting periods beginning on or after 1 July 2023; and
• do not early adopt any AASBs and Interpretations that have been issued or amended but are not yet effective.
Financial statements of subsidiaries are prepared using consistent accounting policies. This Note and Note 27 set out details of
accounting policies which aid the understanding of the financial statements as a whole.
(d) Use of estimates and judgements
The preparation of consolidated financial statements in conformity with Australian Accounting Standards requires management
to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements
about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from
these estimates.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results.
Information about judgements and estimates made in applying accounting policies that may have a significant effect on
amounts recognised in the consolidated financial statements is included in the following notes:
• Determination of fair value of assets acquired in business combinations (Note 3);
• Recoverability of goodwill and other indefinite life intangible assets (Note 13); and
• Assessment of lease term extension options to be taken into account in the present value of the remaining
lease payments (Note 12).
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Financial Statements
73
72
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
1. Basis of preparation (continued)
(e) Changes in accounting policy, disclosures, standards and interpretations
• New and amended standards and interpretations
The Group applied all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the
Group and effective for annual period beginning on or after 1 July 2023. The initial adoption of these standards and interpretation
have not had a material impact on the measurement or disclosure made in the consolidated financial statements.
• Standards and Interpretations issued but not yet effective
AASB 18 Presentation and Disclosure in Financial Statements
AASB 18 was issued in June 2024 and replaces AASB 101 Presentation of Financial Statements. The new standard introduces new
requirements for the Statement of Profit or Loss, including:
• new categories for the classification of income and expenses into operating, investing and financing categories, and
• presentation of subtotals for “operating profit” and “profit before financing and income taxes”.
Additional disclosure requirements are introduced for management-defined performance measures and new principles for
aggregation and disaggregation of information in the notes and the primary financial statements and the presentation of interest
and dividends in the statement of cash flows. The new standard is effective for annual period beginning on or after 1 January 2027
and will first apply to the Group for the financial year ending 30 June 2028.
Certain other Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and
have not been early adopted by the Group for the year ended 30 June 2024. The Group is assessing the potential impact of these
standards and interpretation issued but not yet effective on its consolidated financial statements.
2. Segment reporting
Segment information is presented in a manner which is consistent with the internal reporting to the Chief Executive Officer,
who is the chief operating decision maker in the allocation of resources and assessing the performance of the operating
segments of the Group.
The Group’s regionally based segments are based on geographic operation of the business and comprise:
• Asia Pacific, including Australia, New Zealand, Korea and China1
• Americas, including the United States of America and Canada
• EMEA, including the United Kingdom, Germany, Spain, Italy, Poland, France and Czech Republic
Segment revenues, expenses, assets and liabilities are reported on a gross basis. Segment results are presented before the
elimination of profits made on inventory sales between segments, with a total deduction for intersegment profits to arrive at the
Group’s consolidated operating profit.
1 Ningbo Rockwall Manufacturing business in China is reported under the Americas segment consistent with internal reporting to the CODM.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
2. Segment reporting (continued)
Americas
Asia Pacific
EMEA
Corporate
Elimination
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
Revenue
From external customers
875,834
886,607
145,849
120,273
224,071
236,922
–
–
–
–
1,245,754
1,243,802
From other segments
1,843
3,462
44,440
70,087
39,573
35,220
–
–
(85,856)
(108,769)
–
–
Segment revenues
877,677
890,069
190,289
190,360
263,644
272,142
–
–
(85,856) (108,769)
1,245,754
1,243,802
Cost of sales
(555,973)
(594,269) (146,875)
(143,857) (139,686) (139,250)
–
–
85,542
111,780
(756,992)
(765,596)
Gross profit
321,704
295,800
43,414
46,503
123,958
132,892
–
–
(314)
3,011
488,762
478,206
Other income
4,512
2,893
25
658
1,393
15,440
111
–
–
–
6,041
18,991
Product development expenses
(7,388)
(6,867)
(2,463)
(2,300)
(3,137)
(2,679)
–
–
–
–
(12,988)
(11,846)
Selling and marketing expenses
(106,394)
(104,764)
(21,075)
(14,010)
(32,648)
(32,028)
(493)
(315)
–
–
(160,610)
(151,117)
Administration expenses
(59,425)
(60,595)
(16,705)
(11,120)
(31,216)
(27,489)
(9,202)
(7,917)
–
–
(116,548)
(107,121)
Other expenses
(11,964)
(2,667)
(384)
(620)
(4,834)
(57)
–
(267)
–
–
(17,182)
(3,611)
Segment operating profit/(loss)
141,045
123,800
2,812
19,111
53,516
86,079
(9,584)
(8,499)
(314)
3,011
187,475
223,502
Segment assets
955,113
991,666
383,155
229,729
787,017
805,817 1,027,348 1,004,536 (1,008,134)
(973,163)
2,144,499 2,058,585
Segment liabilities
623,944
710,957
225,237
60,612
60,802
68,311
978,282
960,510 (1,008,134)
(973,163)
880,131
827,227
EBITDA1
173,352
152,304
14,278
28,642
68,865
99,806
(8,658)
(7,621)
(313)
3,012
247,524
276,143
Depreciation of property, plant and equipment
(24,403)
(20,353)
(10,073)
(8,903)
(13,357)
(12,051)
(254)
(167)
–
–
(48,087)
(41,474)
Amortisation of intangible assets
(7,906)
(8,151)
(1,392)
(627)
(1,990)
(1,674)
(674)
(715)
–
–
(11,962)
(11,167)
Finance income
146
139
41
7
2
9
437
191
–
–
626
346
Finance costs
(23,752)
(28,628)
(3,333)
(1,306)
(665)
(495)
(3,818)
(2,259)
–
–
(31,568)
(32,688)
Income tax expense
(32,334)
(31,351)
(469)
(3,420)
(12,759)
(15,926)
(826)
(813)
–
–
(46,388)
(51,510)
Net profit after tax
110,145
139,650
Additions to property, plant and equipment2
23,197
21,887
6,826
6,553
6,595
7,024
2,710
188
–
–
39,328
35,652
Non-current assets excl. deferred tax assets
591,193
521,119
223,626
133,049
685,704
773,908
4,282
3,171
–
6,505 1,504,805
1,437,752
Other material items of income and (expenses)
Supply Smart closure of operations, DC rationalisation
(10,961)
–
–
–
–
–
–
–
–
–
(10,961)
–
APAC Croydon plant final decommissioning
–
–
(304)
–
–
–
–
–
–
–
(304)
–
Spain manufacturing impairment
–
–
–
–
(4,284)
–
–
–
–
–
(4,284)
–
Acquisition related costs
–
(4,339)
(7,441)
–
–
–
–
–
–
–
(7,441)
(4,339)
Restructuring costs
–
(1,603)
–
(1,403)
(4,106)
(3,018)
–
–
–
–
(4,106)
(6,024)
SharkBite Max one-off costs
–
(1,567)
–
–
–
–
–
–
–
–
–
(1,567)
Australia lead-free brass transition costs
–
–
–
(1,577)
–
–
–
–
–
–
–
(1,577)
Gain on sale of surplus UK property
–
–
–
–
–
14,998
–
–
–
–
–
14,998
(10,961)
(7,509)
(7,745)
(2,980)
(8,390)
11,980
–
–
–
–
(27,096)
1,491
1 EBITDA is operating profit before interest, tax, depreciation and amortisation.
2 Excludes the additions of Right of Use lease assets.
75
74
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
3. Business combinations
Accounting policy
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The
consideration transferred in the acquisition is generally measured at fair value of the identifiable net assets acquired.
Identifiable assets acquired and liabilities and contingent liabilities assumed are, with limited exceptions, initially measured
at their fair values at acquisition date. When the Group acquires a set of activities that meets the criteria for a ‘business’, it
assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance
with the contractual terms, economic conditions, the Group’s operating or accounting policies and other pertinent conditions
at acquisition date. Under the acquisition method, the Group has up to 12 months following the acquisition date to finalise the
assessment of fair value of identifiable assets and liabilities.
Any goodwill that arises is tested annually for impairment (refer accounting policy in note 13). Any gain on a bargain purchase is
recognised in the profit or loss account immediately. Transaction costs are expensed as incurred except if related to the issue of
debt or equity securities.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in the profit or loss account.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration
that meets the definition of a financial instrument is classified as equity, then it is not remeasured, and settlement is accounted
for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognised in the profit or loss account.
Acquisition of Holman Industries
(a) Summary of acquisition
The Group completed the acquisition of Holman Industries (Holman) on 1 March 2024 for $104.2 million (A$160.0 million),
excluding provisional closing adjustments. The acquisition was funded through existing committed borrowing facilities. Holman
is a leading independent manufacturer and distributor of branded plumbing and watering products sold through retail and
wholesale channels in Australia. The acquisition of Holman aligns with RWC’s growth strategy and will enhance its market
position in Australia. The Holman products will provide additional sales growth opportunities from an expanded product
portfolio coupled with a much broader retail channel partner distribution footprint in Australia and also achieve cost savings
through distribution footprint rationalisation and optimisation. The Holman acquisition provides RWC with immediate and
substantial access to the Australian water-out segment, strengthening overall offering and better partnering to core plumbing
wholesalers in Australia.
(b) Purchase consideration and summary of cash movement
US$000
Base purchase price
104,177
Closing adjustments1
(3,643)
Total purchase consideration
100,534
Reconciliation of cash movement
Cash consideration paid
104,177
Less: cash acquired
(2,484)
101,693
3. Business combinations (continued)
No direct costs associated with the transaction were capitalised. Costs attributable to the acquisition of approximately $2.6
million were expensed and are reported in “administration expenses” in the consolidated statement of profit or loss account.
These expenses were mainly for legal, due diligence and advisory costs.
(c) Fair value of net assets acquired
Provisional net asset value and allocation of the purchase price to net acquired assets are as follows:
Acquiree’s
carrying
amount1
US$000
Fair value
Adjustments
US$000
Fair value
recognised on
acquisition2
US$000
Identifiable assets
Cash and cash equivalents
2,484
–
2,484
Trade and other receivables
18,693
–
18,693
Inventories3
27,113
3,402
30,515
Plant and equipment (Note 11)
11,809
–
11,809
Right-of-use assets4 (Note 12)
22,998
–
22,998
Intangible assets (Note 13)
- Computer software
14
–
14
- Brand names
–
6,136
6,136
- Customer relationships
–
19,409
19,409
Other non-current assets
1,281
–
1,281
Deferred tax assets (Note 9)
8,055
–
8,055
Total identifiable assets acquired
92,447
28,947
121,394
Identifiable liabilities
Trade and other payables
15,353
–
15,353
Lease liabilities4 (Note 15)
22,998
–
22,998
Employee benefits (Note 18)
1,861
–
1,861
Tax liabilities
370
–
370
Deferred tax liabilities
9,280
8,684
17,964
Total liabilities assumed
49,862
8,684
58,546
Net identifiable assets acquired at fair value
62,848
Purchase consideration
100,534
Provisional goodwill on acquisition and unidentified
other intangible assets
37,686
1 The closing adjustments reflect the adjustment amount per the completion statement submitted on 16 July 2024 to the vendor. The vendor has 30 business days
to review the adjustments and respond.
1 Carrying amount includes the book adjustments made to align with the Group’s accounting policies. The adjustments were made for trade receivables, property, plant and
equipment, accruals for employee benefits and provision for slow moving and obsolete inventory.
2 Fair values are provisionally accounted for at 30 June 2024. The initial accounting for business combinations is provisional for intangible assets and closing adjustments as
the Group has submitted the draft completion statement to the vendor. The completion statement is under review by the vendor. At the date of authorisation of the
consolidated financial statements, these are yet to be finalised and may impact the provisional Goodwill on acquisition.
3 The entire fair value adjustment on inventories was unwound in the consolidated statement of profit or loss during the reporting period.
4 The Group measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition. The right-of-use assets were measured at
an amount equal to the lease liabilities.
Financial Statements
77
76
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
3. Business combinations (continued)
Goodwill on acquisition is attributable mainly to:
• expected sales growth opportunities from an expanded product portfolio coupled with a much broader retail channel partner
distribution footprint in Australia;
• expected cost savings through distribution footprint rationalisation and optimisation; and
• opportunity to substantially increase access to the Australian water-out segment.
Holman contributed operating revenue of $32.2 million for the period from acquisition to 30 June 2024. The net profit before
tax contributed for this period was $0.84 million. If the Group controlled Holman for the entire period, the estimated
consolidated operating revenue would have been $1,339.2 million. The estimated consolidated profit before tax would
have been $163.3 million.
(d) Measurement of fair values
Intangible assets are provisionally valued using the relief from royalty and multi-period excess earnings valuation methods.
The relief from royalty method considers the discounted estimated royalty payments that are expected to be avoided as a result
of the patents or trademarks owned. The multi-period excess earnings method considers the present value of net cash flows
expected to be generated by the customer relationships by excluding any cashflows related to contributory assets.
Inventories are valued using a market comparison technique. The fair value is determined based on the estimated selling price in
the ordinary course of business of a market participant less the estimated costs of completion and sale, and a reasonable profit
margin based on the effort required to complete and sell the inventories.
Critical accounting estimates and assumptions
In accounting for business combinations, judgements and estimates have been made to determine the fair value of intangible
assets, leases and inventories acquired. The determination of fair values involved developing estimates and assumptions
consistent with how market participants would price the assets.
4. Revenue
Accounting policy
Revenue is recognised when a customer obtains control of the goods or services. Group revenue is derived from the sale of
products. Under the terms of sale, the Group generally transfers control when the goods leave a distribution centre. In some
cases, control does not pass until the goods are received by the customer or delivered to the agreed point of delivery.
From time to time the Group may provide rebates to customers in certain geographies, which gives rise to variable
consideration. Where rebates are based on the quantity or value of products sold, the Group uses historical data to estimate
the rebate accrual, which is classified as “contract liabilities” and presented within trade and other payables. The Group’s
contracts with customers do not include a significant financing component.
The principal product categories from which the aforementioned segments derive revenue are:
• Plumbing solutions – brass and plastic push-to-connect plumbing fittings, other fittings, pipes, valves and integrated
installation solutions;
• Appliance installations solutions – Fluid Tech and Appliance Installation and repair; and
• Other products
Revenue by product group for the year ended 30 June:
2024
US$000
2023
US$000
Plumbing solutions
937,087
951,840
Appliance Installation solutions
236,293
229,491
Other products
72,374
62,471
1,245,754
1,243,802
The Group distributes products through three primary distribution channels:
Retail, Wholesale and Original Equipment Manufacturers (OEM)
2024
US$000
2023
US$000
Retail
508,092
464,721
Wholesale
446,505
447,156
OEM
171,868
187,526
Other
119,289
144,399
Other
1,245,754
1,243,802
The Group had two significant customers each representing greater than 10% of the Group’s revenue in the 2024 financial
year. Both customers are in the Americas segment and contributed a combined $436.3 million (FY2023: $431.3 million) of the
Group’s revenue in the financial year.
Revenue by geography for the year ended 30 June:
2024
US$000
2023
US$000
Australia
130,415
104,911
United Kingdom
163,536
172,135
United Sates of America
837,216
847,178
Other
114,587
119,578
Other
1,245,754
1,243,802
Financial Statements
79
78
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
5. Earnings per share
Accounting policy
Earnings Per Share (EPS) is the amount of profit/(loss) attributable to each share. Basic EPS is calculated on the Group’s profit/
(loss) for the reporting period attributable to ordinary shareholders divided by the weighted average number of shares on issue
during the year. Diluted EPS reflects any commitments the Group has to issue shares in the future.
(a) Basic earnings per share
2024
US$000
2023
US$000
Profit attributable to ordinary shareholders
110,145
139,650
Weighted average number of ordinary shares at 30 June (basic)
Number of
shares
2024
Number of
shares
2023
Issued ordinary shares (weighted average)
788,795,897
790,094,765
Treasury shares (weighted average)
(4,175,147)
(5,395,418)
Other
784,620,750
784,699,347
US Cents
US Cents
Basic earnings per share
14.0
17.8
6. Net finance costs
Accounting policy
The Group’s finance income and finance costs include:
• Interest income
• Interest expense
The Group records interest income and accrues interest expense for amounts receivable and payable at reporting date.
Borrowing expenses consist of the costs that the Group incurs in connection with borrowing of funds and are expensed in the
period in which they occur.
Interest income is recognised in the consolidated income statement on an accrual basis, using the effective interest method.
2024
US$000
2023
US$000
Interest income from cash and cash equivalents
626
346
Interest and borrowing expenses
(27,532)
(28,898)
Interest expense on lease liabilities
(4,036)
(3,790)
Total finance costs
(31,568)
(32,688)
7. Other income
2024
US$000
2023
US$000
Net (loss)/gain on sale of property, plant and equipment
(225)
14,998
Other
6,266
3,993
6,041
18,991
In 2023, the Group sold a property in the U.K. for a total consideration of $25.3 million and recognised a pre-tax gain on sale of
$15.0 million ($9.7 million post-tax).
8. Other expenses
2024
US$000
2023
US$000
Impairment expenses
(16,092)
(1,259)
Other expenses
(1,090)
(2,352)
(17,182)
(3,611)
(b) Diluted earnings per share
2024
US$000
2023
US$000
Profit attributable to ordinary shareholders
110,145
139,650
Weighted average number of ordinary shares at 30 June (diluted)
Number of
shares
2024
Number of
shares
2023
Issued ordinary shares (weighted average)
788,795,897
790,094,765
Effect of share options on issue
4,000,000
4,300,000
Treasury shares (weighted average)
(4,175,147)
(5,395,418)
Other
788,620,750
788,999,347
US Cents
US Cents
Diluted earnings per share
14.0
17.7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
Financial Statements
81
80
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
9. Income tax expense (continued)
(a) Reconciliation of prima facie tax expense to income tax expense recognised in the consolidated income statement
The major components that reconcile the expected income tax expense based on the Australian statutory rate of tax of the
Group at 30% to the reported actual income tax expense in the consolidated profit or loss statement are as follows:
30 June
2024
US$000
30 June
2023
US$000
Profit before income tax
156,533
191,160
Prima facie income tax expense at 30%
(46,959)
(57,348)
Tax effect of items which (increase) / decrease tax expense:
Effect of tax rates in foreign jurisdictions
9,392
14,239
Non-deductible expenses
(3,366)
(1,675)
Net (under) over provision from prior years
(3,247)
4,272
Foreign income subject to US tax
(5,916)
(15,109)
Other
3,708
4,111
Actual income tax expense reported in the consolidated statement of profit or loss
and other comprehensive income
(46,388)
(51,510)
(b) Components of income tax
2024
US$000
2023
US$000
Current tax
(43,423)
(41,262)
Deferred Tax
(2,965)
(10,248)
Actual income tax expense reported in the consolidated statement of profit or loss
(46,388)
(51,510)
(c) Deferred tax balances
Opening
Balance
Recognised in
Profit or loss
Acquired through
Business
Combinations
Foreign
Exchange
Closing
Balance
2024
US$000
US$000
US$000
US$000
US$000
Deferred tax assets
Employee benefits
3,461
(204)
522
21
3,800
Other provisions and accruals
6,523
(170)
–
(7)
6,346
Leases1
26,352
1,636
6,900
16
34,904
Research & Development
3,479
2,824
–
–
6,303
US interest limitation
1,855
3,606
–
–
5,461
Tax losses and credits carried forward
1,740
1,942
4
(15)
3,671
Other items giving rise to deferred tax assets
12,728
3,925
629
(10)
17,272
Deferred tax assets before set-off
56,138
13,559
8,055
5
77,757
Set-off of tax
(24,443)
(19,942)
Total
31,695
57,815
9. Income tax expense
Accounting policy
Income tax expense comprises current and deferred tax.
It is recognised in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income except to the extent
that it relates to a business combination or items recognised
directly in equity.
The Group has determined that the global minimum top-up-
tax which is required to be paid under pillar two legislation,
is an income tax in the scope of AASB 112. The Group has
applied a temporary mandatory relief from deferred tax
accounting for the impacts of the top-up tax and accounts
for it as a current tax when it is incurred.
(i) Current tax
The tax currently payable is based on taxable profit for the
reporting period. Taxable profit differs from profit before
tax as reported in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income because of items
of income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The
Group’s current tax is calculated using tax rates that have
been enacted or substantively enacted at the reporting date
in the countries where the Group operates and generates
taxable income.
(ii) Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for
all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which
those deductible temporary differences can be utilised. Such
deferred tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition (other
than in a business combination) of assets and liabilities in
a transaction that affects neither the taxable profit nor the
accounting profit.
Deferred tax assets are recognised for unused tax losses,
unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profits will be
available against which they can be used. Deferred tax assets
are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit
will be realised.
Deferred tax is measured at the tax rates that are expected to
be applied to temporary differences when they reverse using
tax rates enacted or substantively enacted at the reporting
date. The measurement of deferred tax reflects the tax
consequences that would follow the manner in which the
Group expects, at the reporting date, to recover or settle the
carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes
levied by the same taxation authority and the Group intends to
settle its current tax assets and tax liabilities on a net basis.
(iii) Estimating provision for income tax
The Group is subject to income taxes in Australia and
jurisdictions where it has foreign operations. Judgement is
required in determining the Group’s provision for income taxes
and assessing recognition of deferred tax balances in the
Consolidated Statement of Financial Position. There are many
transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination
is uncertain. Where the final tax outcome of these matters is
different from the amounts that were initially recorded such
differences will impact the current and deferred tax provisions
in the period in which such determination is made.
(iv) Global minimum top-up tax
The Organisation for Economic Co-operation and
Development (“OECD”) has introduced an international tax
framework under Pillar Two which includes a global minimum
tax of 15%. This framework has been implemented by several
jurisdictions in which we operate, with effect for RWC from
1 July 2024, and many other jurisdictions are in the process
of implementing it. The Group is closely monitoring these
developments and continues to evaluate the potential impact
of the enactment of Pillar Two by such jurisdictions on its
consolidated financial statements. Our evaluations to date
indicate that there are no profits in the jurisdictions in which we
operate that are expected to be subject to Pillar Two income
taxes. There is no current tax impact for the year ended 30
June 2024. The Group has applied a temporary mandatory
relief from deferred tax accounting for the impacts of Pillar 2.
(v) Australian tax consolidated group
The Company and its Australian incorporated wholly owned
subsidiaries formed a tax consolidated group with effect from
3 May 2016 whereby the members of that group are taxed
as a single entity. The head entity of the tax consolidated
group is Reliance Worldwide Corporation Limited. The head
entity and each subsidiary member of the tax consolidated
group is party to a Tax Sharing Agreement and a Tax Funding
Agreement whereby each member of that group is only
liable for its contribution amount calculated in accordance
with the Agreement rather than being jointly and severally
liable for group tax liabilities. At 30 June 2024, the Australian
tax consolidated group has $4.3 million (2023: $0.9 million)
franking credits available for subsequent reporting periods.
1 Following the amendment to AASB 12 -Deferred tax related to Assets and Liabilities arising from a Single Transaction effective 1 January 2023, the Group has
grossed up the Deferred Tax Assets and Liabilities on Leases for prior year for the APAC region.
Financial Statements
83
82
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
10. Working capital
(a) Trade and other receivables
Accounting policy
Trade and other receivables are initially recognised at fair value and subsequently at cost less any provision for doubtful debts.
Trade receivables are generally due for settlement within 30 days, depending on the nature of the transaction and in line with
industry practice. Collectability of trade receivables is reviewed on an ongoing basis. The carrying amount of trade receivables is
reduced through the use of an allowance account and the amount of the loss is recognised in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income. The Group has adopted the Expected Credit Loss (‘ECL’) model under AASB
9 Financial Instruments to determine its allowance for doubtful debts calculation. This takes into consideration management’s
assessment of the likely level of bad debts (based on historical experience and forward-looking information) as well as any known
‘at risk’ receivables. The recoverability of debtors at 30 June 2024 has been assessed and no material recoverability issues have
been identified.
2024
US$000
2023
US$000
Trade debtors
230,164
240,017
Less: provision for doubtful debts
(3,918)
(3,667)
226,246
236,350
Other debtors
8,095
5,609
Tax receivable
4,471
4,085
238,812
246,044
At 30 June, the ageing of trade and other receivables that were not impaired is as follows:
2024
US$000
2023
US$000
Neither past due nor impaired
215,499
221,509
Past due 1 to 30 days
20,915
15,295
Past due 31 to 60 days
1,011
3,992
Over 60 days
1,387
5,248
Total
238,812
246,044
9. Income tax expense (continued)
(c) Deferred tax balances (continued)
2024
Opening
balance
US$000
Recognised in
profit or loss
US$000
Acquired
through business
combinations
US$000
Foreign
exchange
US$000
Closing
balance
US$000
Deferred tax liabilities
Property, plant and equipment
(20,242)
(3,718)
(2,371)
9
(26,322)
Unrealised foreign exchange movements
(881)
383
–
(1)
(499)
Leases1
(25,210)
(1,101)
(6,900)
(15)
(33,226)
Intangible assets
(64,382)
(11,491)
(7,664)
(3)
(83,540)
Other items giving rise to deferred tax liability
(462)
(597)
(1,029)
(30)
(2,118)
Deferred tax liabilities before set-off
(111,177)
(16,524)
(17,964)
(40)
(145,705)
Set-off of tax
24,443
19,942
Total
(86,734)
(125,763)
2023
Opening
balance
US$000
Recognised in
profit or loss
US$000
Acquired
through business
combinations
US$000
Foreign
exchange
US$000
Closing
balance
US$000
Deferred tax assets
Employee benefits
4,244
(729)
–
(54)
3,461
Other provisions and accruals
5,524
1,034
–
(35)
6,523
Leases1
29,549
(2,888)
–
(309)
26,352
Other items giving rise to deferred tax assets
13,380
6,396
–
26
19,802
Deferred tax assets before set-off
52,697
3,813
–
(372)
56,138
Set-off of tax
(26,973)
(24,443)
Total
25,723
31,695
Deferred tax liabilities
Property, plant and equipment
(18,378)
(1,786)
–
(78)
(20,242)
Unrealised foreign exchange movements
(691)
(202)
–
12
(881)
Leases1
(28,273)
2,777
–
286
(25,210)
Intangible assets
(49,898)
(14,490)
–
6
(64,382)
Other items giving rise to deferred tax liability
(129)
(335)
–
2
(462)
Deferred tax liabilities before set-off
(97,369)
(14,036)
–
228
(111,177)
Set-off of tax
26,973
24,443
Total
(70,395)
(86,734)
1 Following the amendment to AASB 12 -Deferred tax related to Assets and Liabilities arising from a Single Transaction effective 1 January 2023, the Group has
grossed up the Deferred Tax Assets and Liabilities on Leases for prior year for the APAC region.
Financial Statements
85
84
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
10. Working capital (continued)
(b) Inventories
Accounting policy
Inventories are measured at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the
manufacturing process as well as an appropriate portion of related fixed and variable production overheads, based on normal
operating capacity. Costs are assigned on the basis of weighted average costs. Net realisable value is the estimated selling price in
the ordinary course of business less estimated costs of completion and any applicable selling expenses.
2024
US$000
2023
US$000
At cost:
Raw materials and stores
38,000
95,454
Work in progress
68,590
26,621
Finished goods
206,627
187,842
313,217
309,917
Less: provision for diminution
(20,437)
(20,518)
292,780
289,399
Inventories of $757.0 million (2023: $765.6 million) were expensed during the year in cost of sales.
(c) Trade and other payables
Accounting policy
Trade and other payables are measured at amortised cost and are not discounted, due to their short-term nature. The amounts
are unsecured and usually paid within agreed payment terms.
2024
US$000
2023
US$000
Current:
Trade payables
84,038
69,601
Accruals
69,125
59,928
Other payables
25,936
37,012
179,099
166,541
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
11. Property, plant and equipment
Accounting policy
Recognition and measurement
Each class of property, plant and equipment is measured at cost less, where applicable, accumulated depreciation and
impairment losses. Any gain or loss on disposal of an item of property, plant and equipment is included in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
Subsequent expenditure
Subsequent expenditure is only capitalised when it is probable that the future economic benefits associated with the
expenditure will flow to the Group.
Depreciation
Depreciation is recognised so as to write off the cost of property, plant and equipment (other than freehold land and properties
under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives,
residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
The estimated useful lives of property, plant and equipment are as follows:
• Buildings
20-40 years
• Leasehold improvements
5-40 years
• Plant and equipment
3-20 years
Property, plant and equipment are assessed for impairment at each reporting date by evaluating whether indicators of
impairment exist in relation to the continued use of the asset by the Group. Any impairment losses are recognised in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income.
2024
US$000
2023
US$000
Carrying amounts of:
Freehold land
18,748
18,858
Buildings
41,811
33,281
Leasehold improvements
7,696
6,726
Plant and equipment
171,865
172,273
240,120
231,138
Financial Statements
87
86
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
11. Property, plant and equipment (continued)
Freehold
land
Buildings
Leasehold
improvements
Plant and
equipment
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
Cost:
Opening balance at 1 July
18,858
12,011
56,194
63,428
13,135
13,021
431,868
401,192
520,055
489,652
Transfers/reclassification
–
6,118
(3,101)
3,005
71
170
(4,591)
2,631
(7,621)
11,924
Additions
–
–
11,999
933
1,656
942
25,673
33,777
39,328
35,652
Acquired through business combinations (Note 3)
–
–
–
–
988
–
10,821
–
11,809
–
Disposals
–
–
(1,117)
(12,838)
(589)
(1,166)
(17,734)
(8,956)
(19,440)
(22,960)
Net effect of change in exchange rates
(110)
729
(227)
1,666
(4)
168
(707)
3,224
(1,048)
5,787
Closing balance at 30 June
18,748
18,858
63,748
56,194
15,257
13,135
445,330
431,868
543,083
520,055
Accumulated depreciation and impairment:
Opening balance at 1 July
–
–
(22,913)
(18,766)
(6,409)
(6,041)
(259,595)
(239,858)
(288,917)
(264,665)
Depreciation
–
–
(2,133)
(1,789)
(1,061)
(853)
(29,444)
(26,408)
(32,638)
(29,050)
Transfers/ reclassification
–
–
4,211
631
(554)
(401)
3,103
(973)
6,760
(743)
Disposals
–
–
144
(2,359)
422
1,003
16,647
13,522
17,213
12,166
Impairment
–
–
(1,100)
–
–
–
(5,026)
(2,122)
(6,126)
(2,122)
Net effect of change in exchange rates
–
–
(146)
(630)
40
(117)
851
(3,756)
745
(4,503)
Closing balance at 30 June
–
–
(21,937)
(22,913)
(7,562)
(6,409)
(273,464)
(259,595)
(302,963)
(288,917)
Net carrying value at 30 June
18,748
18,858
41,811
33,281
7,695
6,726
171,866
172,273
240,120
231,138
12. Leases
The Group leases various properties, equipment and vehicles. Property leases typically are for a period of 5 to 15 years and often
have extension options. Equipment and vehicle leases are typically for a period of 3 to 5 years. Lease terms are negotiated on an
individual basis and contain a wide range of different terms and conditions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available
for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the
statement of financial performance over the lease period. The right-of-use asset is depreciated over the shorter of the asset’s
useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured at present value. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be determined, or the Group’s incremental borrowing rate. The Group has elected
not to recognise right of use assets or lease liabilities for payments associated with short-term leases (with a term of 12 months
or less) and leases of low-value assets. Payments relating to these items are recognised on a straight-line basis as an expense in
the statement of financial performance.
Critical accounting estimates and assumptions
Extension options are included in most property leases across the Group. These options are included to maximise operational
flexibility in terms of managing lease contracts. Extension options are only included in the assessed lease term if the lease is
reasonably certain to be extended. The assessment is reviewed if a significant event or change in circumstance occurs which
affects this assessment and that is within the control of the lessee.
Right-of-use assets
Properties
US$000
Equipment
US$000
Vehicles
US$000
Total
US$000
Opening balance at 1 July 2023
91,102
1,545
2,914
95,561
Depreciation charge for the year
(13,647)
(656)
(1,146)
(15,449)
Additions
4,944
1,393
1,094
7,431
Acquired through business combination (Note 3)
22,998
–
–
22,998
Impairment expense
(588)
–
–
(588)
Modifications and terminations
314
448
149
911
Foreign exchange impact
71
(864)
(183)
(976)
Closing balance at 30 June 2024
105,194
1,866
2,828
109,888
Opening balance at 1 July 2022
105,678
1,834
1,309
108,821
Depreciation charge for the year
(10,904)
(571)
(949)
(12,424)
Additions
3,600
517
2,716
6,833
Impairment expense
863
–
–
863
Modifications and terminations
(7,696)
(235)
(225)
(8,156)
Foreign exchange impact
(439)
–
63
(376)
Closing balance at 30 June 2023
91,102
1,545
2,914
95,561
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
Financial Statements
89
88
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
12. Leases (continued)
Amounts recognised in the consolidated statement of profit or loss and other comprehensive income
2024
US$000
2023
US$000
Depreciation charge for right-of-use assets:
Properties
13,647
10,904
Equipment
656
571
Vehicles
1,146
949
Total depreciation charge for right-of-use assets
15,449
12,424
Expense relating to short-term and low-value leases
2,793
2,869
Interest expense on lease liabilities
4,036
3,790
Finance income on a property sub-lease
(131)
(100)
The Statement of Cash Flows includes cash outflows for lease payments of $17.2 million (30 June 2023 – $15.1 million) within
Cash flows from financing activities.
Some property leases contain extension options exercisable by the Group up to the end of the non-cancellable contract period.
The Group has estimated that the potential future lease payments, should it exercise all available extension options, would result
in an increased lease liability of $61.7 million (30 June 2023 – $30.7 million)
13. Goodwill and other intangible assets
(a) Goodwill
Accounting policy
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
of the acquired entity at the date of acquisition. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill is
not amortised. Instead, it is tested annually for impairment or more frequently if events or changes in circumstances indicate that it
might be impaired and is carried at cost less accumulated impairment losses.
For the purpose of undertaking impairment testing, the Group has identified its cash generating units (CGUs). These are the
smallest groups of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups
of assets. This assessment has been determined by considering operating segments and areas of operation.
The total carrying value of goodwill at balance sheet date was $818.8 million (30 June 2023 – $780.7 million). This was allocated
to the Asia Pacific, Americas and EMEA operating segments based on which CGUs were expected to benefit from the relevant
business combinations at the time of acquisition. The total carrying value of indefinite life intangible assets at balance sheet date
was $233.4 million (30 June 2023 – $227.9 million).
Asia Pacific
Americas
EMEA
Total
2024
US$000
2023
US$000
2024
US$000
2023
US$000
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Goodwill
Opening balance at 1 July
68,738
68,965
284,319
279,611
427,654
409,998
780,711
758,574
Business acquisitions (note 3)
37,686
–
–
–
–
–
37,686
–
Foreign currency
exchange differences
2,895
(227)
(519)
4,708
(1,947)
17,656
429
22,138
Closing balance at 30 June
109,319
68,738
283,800
284,319
425,707
427,654
818,826
780,711
Indefinite lived intangible assets
Closing balance at 30 June
6,136
–
72,700
72,700
154,527
155,234
233,363
227,934
13. Goodwill and other intangible assets (continued)
Goodwill and other intangible assets in respect of the Asia Pacific, Americas and EMEA CGUs have been tested for impairment
at period end. The recoverable amount of the Group’s CGUs has been assessed utilising value in use methodologies, which is
determined by discounting the future cash flows expected to be generated from the continuing use of the CGUs.
Future cash flows projections are based on approved budget submissions that reflect management’s best estimate of revenue,
costs, capital expenditure and cash flows for each CGU. Internal forecasts have been prepared in the context of the current
global economic environment and its impact on repair & remodel and new construction markets.
The value in use assessment at 30 June 2024 was established using a discounted cash flow model which included the following
key assumptions:
• a 5-year forecast period with cash flow projections based on approved FY2025 budget submissions from each region for financial
years 2025, 2026 and 2027, and cash flows beyond the three-year period extrapolated using estimated long-term growth rates;
• FY2025-FY2027 average annual revenue growth rate of 5.8% in Americas, 3.2% for EMEA and 5.9% in Asia Pacific, based on
business assessments; and
The following nominal discount rates have been used in discounting the projected cash flows:
Pre-tax discount rates
Post-tax discount rates
Americas
11.20% (FY2023: 11.20%)
8.75% (FY2023: 8.75%)
Asia Pacific
12.50% (FY2023: 12.50%)
9.50% (FY2023: 9.50%)
EMEA
11.10% (FY2023: 11.10%)
8.75% (FY2023: 8.75%)
The discount rates represent the current market assessment of the risks specific to each CGU and are derived from its weighted
average cost of capital (WACC).
The terminal value of the CGUs has been forecast using the following nominal long term growth rates
• Americas: 2.0%
• Asia Pacific: 2.5%
• EMEA: 2.0%
Terminal growth rates are considered by management to be an appropriate estimate of the long-term average growth rates
achievable in the industries and geographies in which the Group participates. Terminal growth rates are consistent with the
prior year.
With RWC’s goal of achieving a minimum 42% reduction in Scope 1 and Scope 2 emissions by 2030, management has included
the costs associated with this program in the yearly cashflow projections used to determine the recoverable amounts of each
CGU. The primary reduction driver on RWC’s path to 2030 will come from participation in renewables certificates as part of
energy purchases.
(b) Other intangible assets
Critical accounting estimates and assumptions
At time of acquisitions, management determined that some of the intangible assets (brand names, trade names and trademarks)
recognised as part of business combinations had indefinite useful lives. This means that the value of these assets does not reduce
over time and therefore they are not amortised. These assets have no legal or contractual expiry date and are integral to future
revenue generation. Management intends to continue to promote, maintain and defend the brand names, trade names and
trademarks to the extent necessary to maintain their values for the foreseeable future. Management assesses the useful lives of
the Group’s intangible assets at the end of each reporting period. If an intangible asset is no longer considered to have an indefinite
useful life, this change is accounted for prospectively.
Financial Statements
91
90
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
13. Goodwill and other intangible assets (continued)
Accounting policy
Other intangible assets are non-physical assets held by the Group in order to generate revenue and profit. These assets
include brand names, trade names, trademarks, intellectual property, licences, software and website development. They
are recognised either at the cost the Group has paid for them or at their fair value if they are acquired as part of a business
combination. They are amortised over their expected useful life unless they are considered to have an indefinite useful life.
Type of intangible asset
Valuation method
Amortisation method
Estimated useful life
Brand names, trade names
and trademarks
Initially at cost, or fair value
if acquired as part of a
business combination
Indefinite life brands not
amortised, reviewed for
impairment at least annually
n/a
Intellectual property,
software and licence fees
Initially at cost and
subsequently at cost less
accumulated amortisation
Straight-line
Up to 10 years
Product technology
Initially at cost and
subsequently at cost less
accumulated amortisation
Straight-line
Up to 20 years
Customer relationship and
distribution agreements
Initially at fair value at date
of business combination
Straight-line
Up to 20 years
(i) Brand names, trade names and trademarks
Brand names, trade names and trademarks are registered names, symbols, words or other devices used in trade to
indicate the source of a product and distinguish it from other products.
(ii) Intellectual property, software and licence fees
Intellectual property consists of technical drawings and certifications. Software and licence fees mainly relate to the
accounting and reporting platform being implemented throughout the Group.
(iii) Product technology
Technology based intangible assets relate to innovations or technological advances, such as patented technology.
(iv) Customer relationships and distribution agreements
Customer relationship-based intangibles assets relate to established customer relationships and distribution agreements
for the supply of product.
(v) Research and development
Research costs are charged to the profit or loss account as incurred. Development expenditure is only capitalised if it can be
measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable,
and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is
recognised in the profit and loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost
less accumulated amortisation and any accumulated impairment losses. The amortisation of development expenditure is
allocated to other expenses as inventory is sold.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
13. Goodwill and other intangible assets (continued)
Intellectual property,
brand names and
trademarks
Product
technology
Customer
relationships
Licence fees,
software and other
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
US$000
Cost:
Opening balance at 1 July
233,125
226,661
21,100
21,100
77,776
77,257
37,601
29,987
369,602
355,005
Additions
–
52
–
–
–
–
1,985
6,804
1,985
6,856
Acquired through business combinations (Note 3)
6,136
–
–
–
19,409
–
14
–
25,559
–
Disposals
(5,074)
–
–
–
–
–
(2,890)
(1,423)
(7,964)
(1,423)
Transfers from PP&E/reclassification
–
–
–
–
26
–
943
1,993
969
1,993
Net effect of change in exchange rates
(708)
6,412
–
–
(57)
519
(79)
240
(844)
7,171
Closing balance at 30 June
233,479
233,125
21,100
21,100
97,154
77,776
37,574
37,601
389,307
369,602
Accumulated depreciation and impairment:
Opening balance at 1 July
(4,591)
(4,539)
(7,091)
(5,919)
(11,971)
(6,093)
(18,981)
(16,029)
(42,634)
(32,580)
Amortisation
(50)
(49)
(1,172)
(1,172)
(5,547)
(5,649)
(5,193)
(4,297)
(11,962)
(11,167)
Disposals
4,543
–
–
–
–
–
2,027
1,409
6,570
1,409
Impairment
–
–
–
–
(9,378)
–
–
–
(9,378)
–
Net effect of change in exchange rates
2
(3)
–
–
(57)
(229)
11
(64)
(44)
(296)
Closing balance at 30 June
(96)
(4,591)
(8,263)
(7,091)
(26,953)
(11,971)
(22,136)
(18,981)
(57,448)
(42,634)
Net carrying value at 30 June
233,383
228,534
12,837
14,009
70,201
65,805
15,438
18,620
331,859
326,968
93
92
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
14. Net debt
Accounting policy
Borrowings are initially recognised net of transaction costs incurred. Fees paid on the establishment of loan facilities are
recognised as transaction costs where it is probable that some or all of the facility will be drawn down. The fee is deferred until
the drawdown occurs and is amortised on a straight-line basis over the entire life of the facility. Borrowings are classified as
current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting period. Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, and other
short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
(a) Borrowings
Current
Non-current
Total
2024
US$000
2023
US$000
2024
US$000
2023
US $000
2024
US$000
2023
US$000
Bank borrowings - Unsecured
–
–
191,047
201,665
191,047
201,665
Guaranteed Senior Notes/US Private
Placement (USPP) - Unsecured
–
–
250,000
250,000
250,000
250,000
441,047
451,665
441,047
451,665
Less: Transaction costs capitalised
–
–
(2,720)
(1,500)
(2,720)
(1,500)
Total borrowings
–
–
438,327
450,165
438,327
450,165
(b) Net debt
At 30 June 2024
Facility Limit
US$000
Borrowings
US$000
Cash
US$000
Net cash
/(debt)
Balance
US$000
Syndicated Loan Facility (Tranche A1)
(217,500)
(100,047)
–
(100,047)
Syndicated Loan Facility (Tranche A2)
(217,500)
–
–
–
Syndicated Loan Facility (Tranche B)
(290,000)
(86,000)
–
(86,000)
Bilateral US Dollar Facility (Tranche A)
(45,000)
–
–
–
Bilateral US Dollar Facility (Tranche B)
(30,000)
(5,000)
–
(5,000)
Guaranteed Senior Notes/US Private Placement (USPP)
(250,000)
(250,000)
–
(250,000)
Cash and cash equivalents
–
–
19,915
19,915
Total RWC Group
(1,050,000)
(441,047)
19,915
(421,132)
At 30 June 2023
Facility Limit
US$000
Borrowings
US$000
Cash
US$000
Net cash
/(debt)
Balance
US$000
Syndicated Loan Facility (Tranche A)
(435,000)
(176,665)
–
(176,665)
Syndicated Loan Facility (Tranche B)
(290,000)
–
–
–
Bilateral US Dollar Facility (Tranche A)
(45,000)
(25,000)
–
(25,000)
Bilateral US Dollar Facility (Tranche B)
(30,000)
–
–
–
Guaranteed Senior Notes/US Private Placement (USPP)
(250,000)
(250,000)
–
(250,000)
Cash and cash equivalents
–
–
16,617
16,617
Total RWC Group
(1,050,000)
(451,665)
16,617
(435,048)
14. Net debt (continued)
In November 2021, the Company established committed borrowing facilities with a group of lenders totalling $800 million
which comprise:
• a $725 million syndicated multi-currency facility; and
• a $75 million bilateral US dollar facility.
The facilities are governed by a Common Terms Deed and are unsecured. During the year, the Group has extended the maturity
of the Syndicated loan facility (initially maturing in November 2024) across two equal tranches. The facilities have maturity dates
apportioned between 2 to 4 years, with:
• $217.5 million to mature on 30 November 2027 (Tranche A1);
• $217.5 million to mature on 30 November 2028 (Tranche A2) and
• $290.0 million to mature on 30 November 2026 (Tranche B).
Similarly, the maturity of Tranche A of the existing bilateral US dollar facility – $45 million has been extended by three years to
November 2027. Forms and terms of the facilities’ documents are substantially unchanged.
The facilities have a variable interest rate based on a variable base rate plus a margin. The facilities contain financial covenants
which the Company is in compliance with as at 30 June 2024.
In April 2022, the Group completed a $250 million unsecured note issuance in the US Private Placement (USPP) market.
The notes have a fixed coupon rates and maturities from date of inception between 7 to 15 years.
RWC’s weighted average debt maturity was 6.3 years at 30 June 2024 on drawn debt including USPP.
(c) Changes in liabilities arising from financing activities
The table below shows cash and non-cash changes in borrowings for which cash flows were, or will be, classified as financing
activities in the Consolidated Statement of Cash Flows.
Borrowings
Lease liabilities
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Opening balance at 1 July
450,165
576,594
106,855
116,714
Changes from financing cash flows:
Proceeds from drawdowns on facilities
169,973
75,092
–
–
Repayments of facilities
(183,608)
(202,680)
–
–
Principal portion of lease payments
–
–
(13,135)
(11,349)
Interest paid
(26,555)
(28,303)
(4,036)
(3,790)
Total changes from financing cash flows
409,975
420,703
89,684
101,575
Other changes:
New leases, leases modifications and impairment
–
–
7,754
–
Acquired through business combinations (Note 3)
–
–
22,998
–
Interest expense
27,532
28,898
4,036
3,790
Amortisation of prepaid line fees
(968)
(706)
–
–
Other including foreign exchange movement
1,788
1,270
(1,993)
1,490
Closing balance at 30 June
438,327
450,165
122,479
106,855
Financial Statements
95
94
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
14. Net debt (continued)
(d) Cash and cash equivalents
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents include cash on hand and in banks,
net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the Consolidated
Statement of Cash Flows can be reconciled to the related items in the Consolidated Statement of Financial Position as follows:
Cash on hand and at bank comprises:
2024
US$000
2023
US$000
AUD
Australian dollar
6,976
1,924
USD
United States dollar
5,646
5,997
GBP
Pound sterling
140
112
EUR
Euro
1,532
3,659
CAD
Canadian dollar
632
769
NZD
New Zealand dollar
1,157
1,403
CNY
Chinese Yuan
2,590
1,344
Other
1,242
1,409
Cash and cash equivalents in the Consolidated Statement of Cash Flows
19,915
16,617
(e) Reconciliation of cash flow from operations with profit from operations after income tax
2024
US$000
2023
US$000
Profit/(loss) from operations after income tax
110,145
139,650
Depreciation expense
48,087
41,474
Amortisation expense
11,962
11,167
(Profit)/loss on disposal of non-current assets
178
(14,337)
(Gain)/ loss on lease modification
46
–
Impairment expense/(reversal)
16,092
1,259
Share-based payments
4,899
5,815
Net interest expense accounted for as financing cash flows
26,444
28,614
Other finance costs
4,498
3,728
Changes in operating assets and liabilities
Trade and other receivables
28,646
2,261
Inventories
22,773
32,344
Prepayments
(2,309)
2,838
Trade and other payables
(1,363)
(10,202)
Tax balances
6,586
9,110
Employee entitlements
(3,647)
1,675
Other assets and liabilities
1,370
(5,136)
Net cash from operating activities
274,407
250,260
15. Financial risk management
The Group maintains a capital structure for the business to ensure sufficient liquidity and support to fund business operations,
position the business for future growth and provide adequate funding for the Group’s potential acquisition and investment
strategies. The Group’s capital structure, global operations and the nature of business activities result in exposure to operational
risks and a range of financial risks, including market risk (which includes foreign currency risk, interest rate risk and commodity
price risk), liquidity risk and credit risk arising from its operating activities. The carrying amounts and estimated fair values of the
Group’s financial instruments recognised in the financial statements are materially the same.
The Group’s financial risk management is carried out by a central treasury department (Group Treasury) under policies approved
by the Board of Directors. The Audit and Risk Committee has the primary responsibility of overseeing and reporting to the Board
on the Group’s risk management systems and strategies. Various strategies and methods are used to manage different types of
risks that the Group is exposed to, including:
Market risk
Group financial performance is largely dependent on activity in the residential and commercial repair and renovation and new
construction end-markets. Activities in these end-markets are impacted by changes in general economic conditions such as
movements in inflation and interest rates, the level of business spending and consumer confidence and changes to fiscal or
monetary policies, legislation and regulation (including plumbing codes, tariff rates and import duties). Activities in the repair
end-market are also impacted by extreme weather events.
The Group operates in different global regions which diversifies these risks.
Foreign exchange risk
Foreign exchange risk relates to the risk that the fair value of future cash flows of a financial instrument or a highly probable
transaction will fluctuate because of changes in foreign exchange rates. The Group is exposed to foreign exchange risk through
operating activities (sales and purchases made or derived in currencies other than the functional currency), intercompany
financing activities and investment in foreign subsidiaries (which transact in the local currency). The Group does not typically
hedge its foreign exchange exposures but may selectively utilise foreign exchange forward contracts to mitigate fluctuations in
foreign exchange rates.
The Group’s balance sheet exposures of cash, external receivables and payables balances for the major currency exposures at
30 June 2024 are set out below in US dollar equivalents.
USD
GBP
EUR
Other
2024
US$000
2023
US$000
2024
US$000
2023
US$000
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Cash
3,283
876
9
1
95
127
620
14
Trade and other receivables
2,059
1,856
–
–
127
264
664
117
Trade and other payables
(9,852)
(1,861)
(47)
(30)
(4,244)
(3,089)
(129)
–
Net external exposure
(4,510)
870
(38)
(29)
(4,022)
(2,698)
1,155
131
The table below shows the effect on profit after income tax expense and total equity from major currency exposures, had the
exchange rates been 5% higher or lower than the year end rate.
Increase/(decrease)
in profit after income tax
US$000
Increase/(decrease)
in equity
US$000
2024
2023
2024
2023
At relevant 30 June rates
If foreign exchange rate +5%
353
82
–
–
If foreign exchange rate - 5%
(371)
(86)
–
–
Financial Statements
97
96
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
15. Financial risk management (continued)
Interest rate risk
Interest rate risk is the risk that the Group will be adversely affected by movements in floating interest rates that will increase the
cost of floating rate debt. The Group is exposed to cash flow interest rate risk as it borrows funds at floating rates and interest is
received on cash deposits at floating rates. The Group’s borrowings issued at fixed rates expose the Group to fair value interest
rate risk.
At reporting date, the interest rate profile of the Group’s interest-bearing debt was:
2024
Carrying
amount
US$000
2023
Carrying
amount
US$000
Fixed rate debt instruments
Guaranteed Senior Notes – US Private Placement
250,000
250,000
Lease liabilities
122,479
106,855
Variable rate debt instruments
Bank loan facilities – USD
91,000
197,000
Bank loan facilities – AUD
100,047
4,665
If the current interest rate was 100 basis points higher the interest expense for the year would have increased by
$2.0 million (FY2023: $2.0 million).
The Group’s exposure to interest rate risk on the cash and cash equivalents listed in the Consolidated Statement of Financial
Position and the interest-bearing borrowings is disclosed in Note 14.
The Group has determined that if interest rates were to increase or decrease by 100 basis points it would have an immaterial
impact on the Group’s interest income on cash deposits.
Commodity price risk
Commodity price risk is the risk the cost of some key raw material inputs required for the Group’s products are correlated with the
underlying commodity price and, as such, fluctuates over time. The most material exposures for the Group are to the market price
of copper, which is used in the production of brass and to the cost of resins used in the production of plastics. The Group does
not typically hedge its commodity price risk exposures but seeks to manage changing input prices through price negotiations
with customers following changes in the underlying commodity prices, working with suppliers to achieve the maximum level of
stability in their costs and related pricing and seeking alternative supply sources when necessary.
Liquidity risk
Liquidity risk arises from the ability of the Group to meet its financial liabilities and obligations as and when they fall due.
The Group monitors future financial commitments and intends to maintain sufficient cash reserves and headroom in its banking
facilities to meet these objectives on an on-going basis.
The Group prepares regular cash flow forecasts and monitors its liquidity to ensure it will always have sufficient cash to allow it
to meet liabilities as they fall due.
15. Financial risk management (continued)
The Group had cash and cash equivalents of $19.9 million at 30 June 2024 (30 June 2023 - $16.6 million). In addition to its
operating cash at bank the Group has undrawn borrowing facilities available. Details of the borrowing facilities in place and their
terms are disclosed at Note 14.
2024
US$000
2023
US$000
Total facilities available
1,050,000
1,050,000
Amount drawn at 30 June
441,047
451,665
Available at 30 June
608,953
598,335
The contractual cashflows (including interest payments) of the Group’s financial liabilities based on the financing arrangements
in place at period end date are shown in the table below:
2024
Financial liabilities
Carrying
amount
US$000
Less than
1 year
US$000
1 to 2
years
US$000
2 to 5
years
US$000
More than
5 years
US$000
Total
US$000
Trade and other payables
179,099
179,099
–
–
–
179,099
Lease liabilities
122,479
20,565
19,050
49,591
49,234
138,440
Bank borrowings
188,327
16,602
12,299
193,483
–
222,384
Guaranteed Senior Notes/US
Private Placement Notes (USPP)
250,000
9,770
9,770
84,338
237,141
341,019
Total
739,905
226,036
41,119
327,412
286,375
880,942
2023
Financial liabilities
Carrying
amount
US$000
Less than
1 year
US$000
1 to 2
years
US$000
2 to 5
years
US$000
More than
5 years
US$000
Total
US$000
Trade and other payables
166,451
166,451
–
–
–
166,451
Lease liabilities
106,855
15,458
15,082
39,498
52,548
122,586
Bank borrowings
200,165
13,384
206,163
–
–
219,547
Guaranteed Senior Notes/US
Private Placement Notes (USPP)
250,000
9,797
9,770
29,338
301,911
350,816
Total
723,471
205,090
231,015
68,836
354,459
859,401
Financial Statements
99
98
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
15. Financial risk management (continued)
Credit risk
Credit risk relates to the potential failure of the Group’s counterparties (such as customers or financial institutions) to meet their
obligations at the appropriate time. The maximum exposure at any time is equal to the carrying value of the financial assets.
The business seeks to monitor and manage counterparty risk through internal controls and protocols, including customer credit
policies and performing banking and financial activities with financial institutions. As such the Group does not seek collateral in
respect of its trade and other receivables.
At 30 June, the maximum exposure to credit risk for trade and other receivables by geographic region is as follows:
2024
Carrying
amount
US$000
2023
Carrying
amount
US$000
Americas
146,894
176,433
Asia Pacific
46,365
22,112
EMEA
45,553
47,499
Total
238,812
246,044
At 30 June 2024, the Group’s two most significant customers accounted for $92.7 million (FY2023: $104.9 million) of the trade
debtors and receivables amount. Further details of the Group’s trade receivables are included in Note 10(a).
The Group held cash and cash equivalents of $19.9 million (FY2023: $16.6 million). Credit risk is managed by the Group in line with
the counterparty risk framework, which aims to minimise the exposure to a counterparty and mitigate the risk of financial loss
through counterparty failure.
16. Share Capital
Number of shares
Amount
2024
Number
2023
Number
2024
US$
2023
US$
Ordinary shares:
Opening balance at 1 July
790,094,765
790,094,765
1,742,078,163
1,738,845,646
Shares bought back and cancelled1
(4,789,473)
–
(9,500,573)
–
Treasury shares2
–
–
4,699,583
3,232,517
Closing balance at 30 June
785,305,292
790,094,765
1,737,277,173
1,742,078,163
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share at
general meetings of the Company.
17. Reserves
2024
US$000
2023
US$000
Foreign currency translation reserve:
Opening balance at 1 July
(38,158)
(71,750)
Movement resulting from translation of financial statements
of foreign subsidiaries net of tax impacts
(4,147)
33,592
(42,305)
(38,158)
Merger reserve:
Opening balance at 1 July
(840,544)
(840,544)
(840,544)
(840,544)
Share-based payments reserve:
Opening balance at 1 July
18,229
18,195
Share-based payments expense
(2,722)
34
15,507
18,229
Hedging reserve:
Opening balance at 1 July
(8,190)
(8,190)
Hedging loss during the year
–
–
(8,190)
(8,190)
Share buy-back reserve:
Opening balance at 1 July
–
–
Excess paid over average share capital cost
(8,502)
–
(8,502)
–
Total reserves at 30 June
(884,034)
(868,663)
The movement in the foreign currency translation reserve of $4.1 million (FY2023: $33.6 million) relates to the translation of the
Group’s non-U.S. dollar operations into the Group's presentation currency and primarily reflects the exchange rate movements of
the Australian dollar and U.K. pound sterling against the U.S. dollar in the respective period.
Nature and purpose of reserves
(a) Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations and the translation of foreign currency monetary items forming part of a net investment in a
foreign operation.
(b) Merger reserve
The Company, through a wholly owned subsidiary, acquired the entities that carry on the operations of Reliance Worldwide
Corporation in April and May 2016 (“Restructure”). The Directors elected to account for the effect of the Restructure as a common
control transaction in accordance with the provisions of AASB 3: Business Combinations. Consequently, the net assets acquired
were recorded at the carrying values that existed at the time of the transaction. The excess consideration over book value at
acquisition date is recorded in the Merger reserve.
1 On-market share buy-back undertaken as part of the Company’s total distribution amount for the half year ended 31 December 2023 of US4.5 cents per share
($35.6 million), comprising an unfranked interim cash dividend of US2.25 cents per share and the undertaking of an on-market share buy-back for $17.8 million
(equivalent in total US2.25 cents per share).
2 The total acquisition cost of treasury shares held at 30 June 2024 was $10,641,263 (30 June 2023: $15,340,846).
Financial Statements
101
100
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
17. Reserves (continued)
(c) Share-based payments reserve
The share-based payments reserve is used to record the value of share based payments provided to employees, including Key
Management Personnel, as part of their remuneration.
(d) Hedging reserve
The hedging reserve records the effective portion of the cumulative change in the fair value of the hedging instruments used in
cash flow hedges.
(e) Share buy-back reserve
The share buy-back reserve is used to record the excess of the cost of shares bought back and cancelled over the average share
capital cost, which is debited to share capital.
18. Employee benefits
Accounting policy
Retirement benefits costs
Payments to defined contribution retirement benefit plans are recognised as an expense when employees render the service
entitling them to the contributions.
Termination benefits
A liability for a termination benefit is recognised at the earlier of when the Group can no longer withdraw the offer of the
termination benefit and when the entity recognises any related restructuring costs.
Restructuring provisions
A provision is made for restructuring where the Group has a present legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Share-based payments
The fair value of equity settled share-based payment awards granted to employees is recognised as an expense with a
corresponding increase in equity over the vesting period of the grant.
Short and long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of leave entitlements in the period the related service
is rendered. Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long-term employee benefits
are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
Current:
Current employee entitlements include benefits for wages, salaries and annual leave that are expected to be settled within
twelve months of the reporting date. The amounts represent present obligations resulting from employees’ services provided
to reporting date and are calculated at undiscounted rates based on current remuneration and wage rates including related
on-costs such as workers compensation, insurance and payroll tax.
Non-current:
Non-current employee entitlements include leave benefits which employees have earned in return for their continued service,
pursuant to the Legislation and Regulations in the relevant jurisdictions. The entitlement is calculated using expected future
increases in wage and salary rates including related on-costs and expected settlement dates and is discounted back to
present value.
18. Employee benefits (continued)
(a) Employee benefits expenses
Employee benefits expenses recognised in the profit or loss account are:
2024
US$000
2023
US$000
Wages and salaries
152,905
148,701
Severance and restructuring costs
3,786
4,659
Employee leave entitlements
4,908
4,912
Workers compensation premiums
936
706
Superannuation contributions
8,577
8,671
Payroll related taxes
11,479
11,452
Contract labour
18,227
13,220
Share-based payment expense
4,899
5,815
Other payroll related expenses
214
264
205,931
198,400
Recovered in costs of goods sold
(43,217)
(37,964)
162,714
160,436
(b) Employee benefits provisions
Current
Non-current
Total
2024
US$000
2023
US$000
2024
US$000
2023
US$000
2024
US$000
2023
US$000
Employee entitlements:
Opening balance at 1 July
8,319
6,414
4,503
4,865
12,822
11,279
Acquired through business
combinations (Note 3)
1,107
–
754
–
1,861
–
Charged to profit or loss
8,167
9,409
(276)
1,348
7,891
10,757
Paid during the period
(10,903)
(7,089)
(219)
(140)
(11,122)
(7,229)
Foreign currency
exchange differences
6
(43)
(21)
(105)
(15)
(148)
Other
42
(372)
(174)
(1,465)
(132)
(1,837)
Closing balance at 30 June
6,738
8,319
4,567
4,503
11,305
12,822
Financial Statements
103
102
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
19. Share-based payments
Accounting policy
Employee equity incentive plans are accounted for as share based payments, whereby employees render services in
exchange for the awards. The cost of share-based payments is recognised by expensing the fair value of the options or rights
granted, over the period during which the employees become unconditionally entitled to these benefits. Where the plan will
be settled by issuing equity, the corresponding entry is an increase in the share-based payments reserve. The fair value of
rights granted is determined by reference to observed market values. The fair value of the TSR component of performance
rights is independently determined at grant date by an external valuer using a Monte-Carlo simulation. For the non-market
component (EPS), the fair value is independently determined using a Monte-Carlo and an additional EPS forecast simulation.
Non-market performance conditions do not impact the value of shares and performance rights, but rather the estimate of the
number of shares to vest. At each reporting date the Company revises the estimate of the number of non-market component
of performance rights that are expected to vest, and the employee benefits expense recognised each period incorporates this
change in estimate. An expense is recognised for the TSR component of performance rights whether or not the TSR hurdle is
met. No expense is recognised if these rights do not vest due to cessation of employment. No expense is recognised for non-
market components of performance rights that do not ultimately vest.
The Company has established an Equity Incentive Plan (“Plan”) to assist in the motivation, retention and reward of eligible
executives. The Plan is designed to align the interests of employees with the interests of shareholders by providing an
opportunity for eligible employees to receive an equity interest in the Company. The Plan provides flexibility for the Company
to grant rights, options and/or restricted shares as incentives, subject to the terms of individual offers and the satisfaction of
performance conditions determined by the Board from time to time.
Options
Vested (#)
Total (#)
Balance at 30 June 2023
4,300,000
4,300,000
Exercised during the reporting period
(300,000)
(300,000)
Balance at 30 June 2024
4,000,000
4,000,000
Expiry date
30 June 2031
Exercise price per option
A$2.32
Each option provides an entitlement to acquire an ordinary share in Reliance Worldwide Corporation Limited upon payment
of the exercise price and meeting certain vesting criteria. These options are equity settled. The Company has not granted any
other options.
Rights to shares
The Board has approved that nominated, eligible executives and employees be invited to participate in the Plan. Participants are
granted rights to be awarded fully paid ordinary shares in the Company (“Rights”) in accordance with the rules of the Plan and
subject to the offer terms (“Offer”). An Offer constitutes a long-term incentive component of the participant’s remuneration from
the grant date until the end of the vesting period.
19. Share-based payments (continued)
At 30 June 2024, the number of unvested Rights which had been granted by the Company to all participants was 9,805,684
(30 June 2023: 8,197,016). The opening and closing balances of all unvested Rights granted are reconciled as follows:
Number
of Rights
Granted and unvested at 30 June 2023
8,197,016
Granted during FY2024
4,847,211
Vested during FY2024
(2,537,279)
Forfeited, cancelled or lapsed during FY2024
(701,264)
Unvested at 30 June 2024
9,805,684
Subsequent to 30 June 2024 through to the date of this report:
• No additional Rights have been granted;
• 40,026 Rights have vested; and
• A further 23,321 Rights have lapsed or been forfeited or cancelled.
Vesting conditions for all granted Rights include a continuous service period ranging between two and five years.
Unless the Board determines otherwise, if a participant ceases employment with the Group prior to the vesting date and any
of the following has occurred then a pro rata portion of unvested Rights will remain on foot and vest in the ordinary course as
though the participant had not ceased employment:
• The participant’s employment is terminated by the Company without cause; or
• The participant terminates employment for good reason.
The remainder of the Rights will lapse.
The Company has established a subsidiary, Reliance Employee Share Investments Pty Ltd (“Trustee”) to act as trustee of the
Reliance Employee Share Investments Trust. The Trustee will acquire Reliance shares on-market on behalf of the Trust to meet
any obligations to deliver shares to a participant who satisfies the vesting conditions. The movement in the number of shares
held during the reporting period is:
Total
Shares held at 30 June 2023
5,435,049
Acquired during FY2024
–
Shares allocated and transferred to participants
(1,973,466)
Shares held at 30 June 2024
3,461,583
Share Match Plan
The Group has a share match plan to encourage employees to own shares in the Company. Eligible employees can acquire
up to A$5,000 of shares in RWC per plan year from post-tax income with contributions made via a regular salary deduction
(“Purchased Shares”). The Company will match the shares acquired on a 1:2 basis up to a cap A$2,500 of Purchased Shares
subject to the terms of the Share Match Plan (“Matching Rights”). There is a minimum holding period for Purchased Shares of
2 years and a continuous service obligation for Matching Rights to convert into shares on a 1:1 basis. There are no performance
conditions. Participants receive dividends and have voting rights on their Purchased Shares. Matching Rights have no voting or
dividend entitlements prior to vesting. The total number of Matching Rights granted at 30 June 2024 was 116,000.
Financial Statements
105
104
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
20. Group entities
Reliance Worldwide Corporation Limited was incorporated on 19 February 2016 and is the parent, and ultimate controlling entity
of the Group. The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries of
Reliance Worldwide Corporations Limited in accordance with the accounting policies described in Note 1 and 27.
Name of Entity
Country of
Incorporation
Equity
Holding
2024
Equity
Holding
2023
Functional
Currency
Reliance Worldwide Group Holdings Pty Ltd
Australia
100%
100%
AUD
Reliance Worldwide Corporation (Aust.) Pty Ltd
Australia
100%
100%
AUD
Reliance Employee Share Investments Pty Ltd
Australia
100%
100%
AUD
Mongers Park Pty Ltd
Australia
100%
–
AUD
Bookleaf Pty Ltd
Australia
100%
–
AUD
Eden Unit Trust T/A Holman Industries
Australia
100%
–
AUD
Reliance Worldwide Corporation (NZ) Limited
New Zealand
100%
100%
NZD
Holman NZ Limited
New Zealand
100%
–
NZD
Reliance Worldwide Corporation (Canada) Inc
Canada
100%
100%
CAD
Reliance Worldwide Holdings (USA) Corporation
USA
100%
100%
USD
Reliance Worldwide International Group Holdings Corporation
USA
100%
100%
USD
Reliance Worldwide Corporation
USA
100%
100%
USD
Rockwall Manufacturing International, Inc.
British Virgin Islands
100%
100%
USD
Reliance Worldwide Corporation (Europe) S.L.U.
Spain
100%
100%
EUR
Reliance Worldwide Holdings (UK) Limited
United Kingdom
100%
100%
GBP
Reliance Worldwide Finance Limited
United Kingdom
100%
100%
GBP
Reliance Worldwide Holdings (International) LLC
USA
100%
100%
USD
Reliance Worldwide Corporation Holdings (UK) Limited
United Kingdom
100%
100%
GBP
John Guest International Ltd
United Kingdom
100%
100%
GBP
Reliance Worldwide Corporation (UK) Limited
United Kingdom
100%
100%
GBP
Reliance Worldwide Distribution (Europe) Ltd
United Kingdom
100%
100%
GBP
John Guest Automotive GmbH
Germany
100%
100%
EUR
John Guest GmbH
Germany
100%
100%
EUR
Reliance Worldwide Corporation France SAS
France
100%
100%
EUR
John Guest SRL
Italy
100%
100%
EUR
John Guest Korea Ltd
Korea
100%
100%
KRW
John Guest (Shanghai) Trading Co. Ltd
China
100%
100%
CNY
Ningbo Rockwall Manufacturing International, Co Ltd
China
100%
100%
CNY
John Guest Czech S.R.O
Czech Republic
100%
100%
CZK
John Guest Polska Sp zoo
Poland
100%
100%
PLN
21. Commitments and contingencies
(a) Expenditure commitments
Capital expenditure commitments contracted for at balance date but not provided for in respect of plant and equipment:
2024
US$000
2023
US$000
Payable not later than one year
9,066
12,165
Payable later than one year and not later than five years
–
348
9,066
12,513
Details of the Group’s lease commitments are captured in lease liabilities in Note 15.
(b) Contingencies
Financial guarantees
The Company has agreed to provide guarantees to third parties for certain commitments made or entered into by subsidiary
entities in the ordinary course of business. The Company does not consider these guarantees to be material in the context of the
Group’s business.
The Group has provided bank guarantees at 30 June 2024 totalling $3.5 million (2023: $0.8 million).
General contingencies
The Group may be involved in legal claims, administrative actions and proceedings related to the normal conduct of its business
including, among other things, general liability, commercial, employment, intellectual property, and products liability matters
such as the proceeding listed below. Based upon existing information, it is not possible to predict with certainty the outcome or
cost of current legal claims, actions and proceedings. The Group establishes accruals for estimated costs associated with such
matters in a manner which complies with applicable accounting standards. The Directors believe that current matters of which
they are aware should not significantly affect the operations of the Group, the results of those operations or the state of affairs of
the Group in subsequent financial periods.
Reliance Worldwide Corporation (“RWC USA”), a member of the Group, is a party to a putative class action filed in the U.S.
federal district court in Atlanta, Ga., in connection with alleged product liability claims. RWC USA reached a settlement to resolve
the pending class action and it has been submitted to the Court for approval. The expected financial impact has been recognised
in the Group’s Consolidated Financial Statements in prior financial periods, and is not material to the Group’s financial position,
results of operations or cash flows.
The Directors are not aware of any other material contingent liabilities at balance date or arising since the end of the
financial period.
Financial Statements
107
106
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
22. Key Management Personnel and related party transactions
Under Australian Accounting Standards, the term Key Management Personnel refers to directors (both non-executive directors and
executive directors) and those persons having the authority and responsibility for planning, directing and controlling the activities of
the Group, directly or indirectly. The Key Management Personnel of the Group during the reporting period until the date of this report
are set out below. All Key Management Personnel held their positions for the entire reporting period unless otherwise noted.
Stuart Crosby
Independent Non-Executive Chairman
Russell Chenu
Independent Non-Executive Director
Sharon McCrohan
Independent Non-Executive Director
Christine Bartlett
Independent Non-Executive Director
Ian Rowden
Independent Non-Executive Director
Darlene Knight
Independent Non-Executive Director
Brad Soller
Independent Non-Executive Director
Heath Sharp
Managing Director and Chief Executive Officer
Andrew Johnson
EVP and Chief Financial Officer
(a) Key Management Personnel compensation
Details of the total remuneration of Key Management Personnel of the Group during the reporting period are:
2024
US$
2023
US$
Short-term employee benefits
4,533,410
3,515,975
Post-employment benefits
97,912
90,801
Share-based payments
1,444,534
1,190,857
Total
6,075,856
4,797,633
(b) Key Management Personnel transactions in shares and options
The total direct and indirect interests of Key Management Personnel, including their related parties, in the share capital and
options of the Company at 30 June 2024 are:
Shares
Options
Rights
2024
Number
2023
Number
2024
Number
2023
Number
2024
Number
2023
Number
Stuart Crosby
201,756
201,756
–
–
–
–
Russell Chenu
185,217
170,217
–
–
–
–
Sharon McCrohan
52,000
52,000
–
–
–
–
Christine Bartlett
50,000
50,000
–
–
–
–
Ian Rowden
50,000
35,000
–
–
–
–
Darlene Knight
50,000
37,000
–
–
–
–
Brad Soller
25,000
15,000
–
–
–
–
Heath Sharp
1,758,814
1,423,397
4,000,000
4,000,000
2,390,641
1,570,855
Andrew Johnson
400,341
171,236
–
–
753,560
768,757
Total
2,773,128
2,155,606
4,000,000
4,000,000
3,144,201
2,339,612
At 30 June 2024, no Key Management Personnel had been offered or held any rights to be awarded shares other than as
disclosed above.
22. Key Management Personnel and related party transactions (continued)
(c) Transactions with other related parties
There were no material contracts between a KMP or a related party and the Company or any of its subsidiaries entered into
during the reporting period.
No KMP has entered into a loan made, guaranteed or secured, directly or indirectly, with or by the Company or any of its
subsidiaries during the reporting period.
23. Auditor’s remuneration
KPMG are the auditors of the Company. The total remuneration received, or due and receivable by KPMG from the Group is:
2024
US$
2023
US$
KPMG Australia
Audit services
780,622
738,264
Other assurance and non-audit services
• Tax services
32,379
32,846
• Other services
31,549
–
Total remuneration paid to KPMG Australia
844,550
771,110
Overseas KPMG offices
Audit services
203,902
268,989
Tax services
80,132
45,684
Total remuneration paid to KPMG overseas
284,034
314,673
Total remuneration to KPMG
1,128,584
1,085,783
Total remuneration for audit services
984,524
1,007,253
Total remuneration for other assurance and non-audit services
144,060
78,530
Financial Statements
109
108
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
24. Deed of cross guarantee
The wholly owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and
lodgement of financial reports and Directors’ reports following the execution of a new Deed of Cross Guarantee (“Deed”) on
26 June 2024. The Deed complies with the relevant ASIC instrument/class order.
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of
any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the
Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have
also given similar guarantees in the event the Company is wound up.
The holding entity for the purpose of the Deed is Reliance Worldwide Corporation Limited.
The subsidiaries who are parties to the Deed are:
• Reliance Worldwide Group Holdings Pty Ltd;
• Reliance Worldwide Corporation (Aust.) Pty Ltd;
• Mongers Park Pty Ltd
A consolidated statement of profit or loss and other comprehensive income, comprising the Company and controlled entities
which are party to the Deed and after eliminating all transactions between those entities, for the year ended 30 June 2024 and a
Statement of Financial Position for the same group for entities at balance date are set out below.
Statement of profit or loss and other comprehensive income
2024
US$000
2023
US$000
Revenue from sale of goods
176,650
173,720
Cost of sales
(137,874)
(137,173)
Gross profit
38,776
36,547
Other income
24
318
Product development expenses
(2,463)
(2,300)
Selling, warehousing and marketing expenses
(18,458)
(11,894)
Administration expenses
(25,657)
(18,441)
Other expenses
(328)
(276)
Operating (loss)/profit
(8,106)
3,954
Finance income
450
179
Finance costs
(7,150)
(3,564)
Net finance costs
(6,700)
(3,385)
Dividend income
81,605
117,609
Profit before tax
66,799
118,178
Income tax expense (benefit)
4,687
2,276
Profit for the period attributable to the Owners of the Company
71,486
120,454
Other comprehensive profit
Items that may be classified to profit or loss:
Foreign currency translation differences
–
–
Total comprehensive profit for the period attributable to the Owners of the Company
71,486
120,454
24. Deed of cross guarantee (continued)
Statement of financial position
2024
US$000
2023
US$000
Assets
Current assets
Cash and cash equivalents
8,486
2,399
Trade and other receivables
60,613
26,234
Inventories
63,817
53,267
Current tax assets
3,288
7,201
Other current assets
2,480
1,954
Total current assets
138,684
91,055
Non-current assets
Property, plant and equipment
39,858
28,544
Right-of-use assets
45,208
25,855
Investment in subsidiaries
1,571,605
1,571,605
Deferred tax assets
22,744
5,398
Goodwill
77,972
37,194
Other intangible assets
27,482
3,136
Other non-current assets
9,005
11,310
Total Non-current assets
1,793,874
1,683,042
Total assets
1,932,558
1,774,097
Liabilities
Current liabilities
Trade and other payables
38,381
16,758
Employee benefits
3,680
2,413
Other current liabilities
8,372
4,205
Total current liabilities
50,433
23,376
Non-current liabilities
Borrowings
97,439
3,235
Deferred tax liabilities
25,896
3,482
Employee benefits
3,690
3,073
Other non-current liabilities
39,972
24,322
Total non-current liabilities
166,997
34,112
Total liabilities
217,430
57,488
Net assets
1,715,128
1,716,609
Equity
Share capital
1,488,246
1,494,339
Reserves
(3,009)
7,168
Retained earnings
229,891
215,102
Total equity
1,715,128
1,716,609
Financial Statements
111
110
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
25. Parent entity disclosure
As at, and throughout, the financial year ended 30 June 2024, the parent entity of the Group was Reliance Worldwide
Corporation Limited.
(a) Result of the parent entity
2024
US$000
2023
US$000
Profit for the period
80,364
123,272
Other comprehensive income
–
–
Total comprehensive profit for the period
80,364
123,272
(b) Statement of financial position of the parent entity at 30 June
2024
US$000
2023
US$000
Assets
Current assets
19,899
18,901
Non-current assets
1,888,499
1,882,578
Total assets
1,908,398
1,901,479
Liabilities
Current liabilities
6,072
2,497
Non-current liabilities
3,120
4,862
Total liabilities
9,192
7,359
Net assets
1,899,206
1,894,120
Equity
Share capital
1,728,078
1,732,879
Reserves
46,136
59,332
Retained earnings
124,991
101,909
Total equity
1,899,205
1,894,120
(c) Parent entity contingent liabilities
The Company has agreed to provide guarantees for certain commitments made or entered into by subsidiary entities in the
ordinary course of business. The Company does not consider these guarantees to be material in the context of the Group’s
business. Refer to Note 21.
(d) Parent entity capital commitments for acquisition of property, plant and equipment
The Company did not enter into any material contracts to purchase plant and equipment during the year.
(e) Parent entity guarantees in respect of the debts to its subsidiaries
The Company has entered into a Deed of Cross Guarantee with the effect that it guarantees liabilities and obligations in respect
of some Australian subsidiaries in certain circumstances. Refer to Note 24.
26. Subsequent events
On 20 August 2024, the Directors resolved to declare a final distribution amount for the 2024 financial year of US5.0 cents per
share comprising an unfranked cash dividend of US2.5 cents per share and the undertaking of an on-market share buy-back for
US$19.6 million (equivalent in total to US2.5 cents per share). The cash dividend will be paid in Australian dollars at the rate of
3.781 cents per share. The cash dividend will be paid to eligible shareholders on 4 October 2024. The Company does not have a
dividend reinvestment plan.
The Directors are not aware of any other matters or circumstances that have occurred since the end of the financial year that
have significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial periods.
27. Other accounting policies
(a) Basis of consolidation
This note sets out details of accounting policies which aid the understanding of the financial statements as a whole.
Accounting policies which are specific to a particular income, expense or account balance are described in the note to
which that policy relates.
(i) Principles of consolidation
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
(ii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated.
(b) Foreign currency
The individual financial statements of each entity comprising the Group are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purposes of these consolidated financial statements,
US dollar is the presentation currency and Australian dollar is the functional currency of the Company.
(i) Foreign currency transactions
In preparing the financial statements of each individual entity, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of
each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates at the date of the transaction.
(ii) Foreign operations
For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations
are translated into US dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are
translated at average exchange rates. Exchange differences arising, if any, are recognised in other comprehensive income and
accumulated within Foreign Currency Translation Reserve (“FCTR”). The FCTR comprises all foreign currency differences arising
from the translation of the financial statements of the foreign operations.
Financial Statements
113
112
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2024
27. Other accounting policies (continued)
(c) Financial instruments
Non-derivative financial instruments: Recognition, Measurement, Classification and De-recognition
Non-derivative financial assets are classified into the following categories: (a) cash and cash equivalents and (b) trade and other
receivables. Non-derivative financial liabilities are classified into the following categories: (a) trade and other payables and (b)
borrowings.
Trade receivables are initially recognised when they are originated. All other financial assets and financial liabilities are initially
recognised when the Group becomes a party to the contractual provisions of the instruments. A financial asset (unless it is a
trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item
not at fair value through the profit and loss (FVTPL), transaction costs attributable to its acquisition or issue. A trade receivable
without a significant financing component is initially measured at the transaction price.
On initial recognition a financial asset is classified as measured at amortised cost, fair value through other comprehensive
income (FVOCI) or FVTPL. A financial asset is measured at amortised cost if it meets both of the following conditions and not
designated as FVTPL:
• It is held within a business model whose objective is to hold assets to collect contractual cash flows and;
• Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
The Group classifies and measures financial assets it has recognised at amortised cost. These assets are subsequently
measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is
recognised in profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as FVTPL if it is
classified as held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are
measured at fair value. Other financial liabilities are subsequently measured at amortised cost using the effective interest
method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition
is also recognised in profit or loss.
Financial assets are derecognised when the contractual rights to cash flows from the financial asset expire or when the financial
asset and all the substantial risks and benefits are transferred. Financial liabilities are derecognised when they are extinguished,
discharged, cancelled or they expire. On derecognition of a financial liability, the difference between the carrying amount
extinguished and the consideration paid is recognised in profit or loss.
(d) Fair value measurement
The fair values of the Group's financial assets and financial liabilities reflect the amounts that would be received to sell the
assets or paid to transfer the liabilities in an orderly transaction between market participants at the measurement date
(exit price). The Group determines fair value based on a three-tiered fair value hierarchy. The hierarchy consists of:
• Level 1: fair value measurements represent exchange-traded securities which are valued at quoted prices (unadjusted) in
active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date;
• Level 2: fair value measurements are determined using input prices that are directly observable for the asset or liability or
indirectly observable through corroboration with observable market data; and
• Level 3: fair value measurements are determined using unobservable inputs, such as internally developed pricing models for
the asset or liability due to little or no market activity for the asset or liability.
(e) Goods and services tax (GST)/Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of GST/ VAT except where the amount of GST/ VAT incurred is
not recoverable from the Australian Taxation Office and other tax authorities. In these circumstances, the GST/ VAT is recognised
as part of the cost of acquisition of the asset or as part of the item of expense. Receivables and payables in the statement of
financial position are shown inclusive of GST/ VAT. Cash flows are presented on a gross basis. The GST/ VAT components arising
from investing and financing activities are presented as operating activities. Any commitments are disclosed net of GST/ VAT.
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
At 30 June 2024
Below is the information relating to entities that are consolidated in the consolidated financial statements at the end of the financial year as required by the Corporations Act 2001 (s.295(3A)(a)).
Entity name
Entity type
Place
formed or
incorporated
% of shares held directly or
indirectly by the Company or
body corporate
Australian
or foreign
resident
Foreign jurisdiction
Reliance Worldwide Corporation Limited
Body Corporate
Australia
–
Australian
–
Reliance Worldwide Group Holdings Pty Ltd
Body Corporate
Australia
100%
Australian
–
Reliance Worldwide Corporation (Aust.) Pty Ltd
Body Corporate
Australia
100%
Australian
–
Reliance Employee Share Investments Pty Ltd
Body Corporate, Trustee
Australia
100%
Australian
–
Mongers Park Pty Ltd
Body Corporate
Australia
100%
Australian
–
Bookleaf Pty Ltd
Body Corporate, Trustee
Australia
100%
Australian
–
Eden Unit Trust T/A Holman Industries
Trust
Australia
100%
Australian
–
Reliance Worldwide Corporation (NZ) Limited
Body Corporate
New Zealand
100%
Foreign
New Zealand
Holman NZ Limited
Body Corporate
New Zealand
100%
Foreign
New Zealand
Reliance Worldwide Corporation (Canada) Inc
Body Corporate
Canada
100%
Foreign
Canada
Reliance Worldwide Holdings (USA) Corporation
Body Corporate
USA
100%
Foreign
USA
Reliance Worldwide International Group Holdings Corporation
Body Corporate
USA
100%
Foreign
USA
Reliance Worldwide Corporation
Body Corporate
USA
100%
Foreign
USA
Rockwall Manufacturing International, Inc.
Body Corporate
British Virgin Islands
100%
Foreign
British Virgin Islands
Reliance Worldwide Corporation (Europe) S.L.U.
Body Corporate
Spain
100%
Foreign
Spain
Reliance Worldwide Holdings (UK) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Reliance Worldwide Finance Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Reliance Worldwide Holdings (International) LLC
Body Corporate
USA
100%
Foreign
USA
Reliance Worldwide Corporation Holdings (UK) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
John Guest International Ltd
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Reliance Worldwide Corporation (UK) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Reliance Worldwide Distribution (Europe) Ltd
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
John Guest Automotive GmbH
Body Corporate
Germany
100%
Foreign
Germany
John Guest GmbH
Body Corporate
Germany
100%
Foreign
Germany
Reliance Worldwide Corporation France SAS
Body Corporate
France
100%
Foreign
France
John Guest SRL
Body Corporate
Italy
100%
Foreign
Italy
John Guest Korea Ltd
Body Corporate
Korea
100%
Foreign
Korea
John Guest (Shanghai) Trading Co. Ltd
Body Corporate
China
100%
Foreign
China
Ningbo Rockwall Manufacturing International, Co Ltd
Body Corporate
China
100%
Foreign
China
John Guest Czech S.R.O
Body Corporate
Czech Republic
100%
Foreign
Czech Republic
John Guest Polska Sp zoo
Body Corporate
Poland
100%
Foreign
Poland
115
114
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
At 30 June 2024
Key assumptions and judgements
Determination of tax residency
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the
Consolidated Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australia resident,
“Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency
involves judgment as the determination of tax residency is highly fact dependent and there are currently several different
interpretations that could be adopted, and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commission of
Taxation’s public guidance in Tax Ruling TR 2018/5 and PCG 2018/9.
Foreign tax residency
The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign
tax residency.
Trusts
Australian tax law generally does not contain corresponding residency tests for trusts and these entities are typically taxed
on a flow-through basis.
DIRECTORS’ DECLARATION
For the year ended to 30 June 2024
Stuart Crosby
Chairman
Melbourne
20 August 2024
Heath Sharp
Chief Executive Officer
and Managing Director
In the opinion of the Directors of Reliance Worldwide Corporation Limited (“the Company”):
1. the consolidated financial statements and notes set out on pages 69 to 114, are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards, other mandatory professional reporting requirements
and the Corporations Regulations 2001.
2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable
3. there are reasonable grounds to believe that the Company and the Group entities identified in Note 24 will
be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the
Deed of Cross Guarantee described in Note 24.
4. the information presented in the consolidated entity disclosure statement on page 115 to 116 is true and correct
at the end of the financial year.
The Directors draw attention to Note 1 to the consolidated financial statements which includes a statement
of compliance with International Financial Reporting Standards.
The Directors have received the declarations by the Chief Executive Officer and Chief Financial Officer required
by Section 295A of the Corporations Act 2001.
Signed in accordance with resolution of the Directors.
Directors’ Declaration
117
116
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the shareholders of Reliance Worldwide Corporation Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Reliance Worldwide Corporation Limited
(the Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and fair
view, including of the Group’s financial
position as at 30 June 2024 and of its
financial performance for the year then
ended, in accordance with the Corporations
Act 2001, in compliance with Australian
Accounting Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2024
• Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended
• Consolidated entity disclosure statement and
accompanying basis of preparation as at 30 June 2024
• Notes, including material accounting policies
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during the
financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with
these requirements.
119
Key Audit Matters
The Key Audit Matters we identified are:
• Acquisition of Holman Industries
• Valuation of goodwill and indefinite life
intangible assets
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Acquisition of Holman Industries
Refer to Note 3 Business Combination to the Financial Report
The key audit matter
How the matter was addressed in our audit
The acquisition of Holman Industries
("Holman") for consideration of $100.7m is a
key audit matter due to the:
• size of the acquisition having a significant
impact on the Group's financial
statements; and
• significant judgement required to be
exercised by us in assessing the Group's
accounting for the identification and
measurement of acquired intangible
assets such as brand names and
customer relationships. The Group
engaged an external expert to advise on
the identification and measurement of
acquired intangible assets.
These factors and the complexity of the
acquisition accounting required significant
audit effort and involvement of senior audit
team members, including our specialists, in
assessing this key audit matter.
Our procedures included:
• We read the underlying acquisition agreement to
understand the structure, key terms and conditions
and nature of the purchase consideration.
• We evaluated the acquisition accounting against
accounting standard requirements.
• With the assistance of our valuation specialists and
using our knowledge of the Group, their past
performance, business and customers, and our
industry experience we:
• assessed the scope, competence and objectivity of
the Group's external expert;
• evaluated the Group's assessment of acquired
intangible assets such as brand names and
customer relationships, against the Group's due
diligence information and our industry knowledge;
• evaluated the valuation methodology for the
acquired intangible assets against our knowledge of
accepted industry practice and accounting standard
requirements;
• assessed the Group's assumptions used in the
valuation of the acquired intangible assets against
published comparable company data and
considered differences for the Group's operations;
and
• checked inputs to the Group's external expert
report to the Group's valuation model used as part
of the due diligence process and to historical cash
flow data of the acquiree.
• We recalculated the goodwill balance recognised and
compared it to the goodwill amount recorded by the
118
Group.
• We assessed the disclosures in the financial report
using our understanding obtained from our testing and
against accounting standard requirements.
Valuation of goodwill ($818.8m) and indefinite life intangible assets ($213.7m)
Refer to Note 13 Goodwill and other intangible assets to the Financial Report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
annual impairment testing of goodwill and
indefinite life intangible assets, given the
size of the balance (48% of total assets).
We focused on the significant forward-
looking assumptions the Group applied in
their value in use models, including:
• forecast operating cash flows – the Group
has experienced continued uncertainty
around inflation expectations, commodity
prices and broader economic conditions
across its operating jurisdictions. These
conditions increase the risk of inaccurate
forecasts or a wider range of possible
outcomes for us to consider, leading to
the possibility of goodwill and indefinite
life intangible assets being impaired.
• terminal growth rates – in addition to the
uncertainties described above, the
Group’s models are sensitive to changes
in terminal growth rates, reducing
available headroom. This drives additional
audit effort specific to their feasibility and
consistency of application to the Group’s
strategy.
• discount rates – these are complicated in
nature and vary according to the
conditions and environment of each Cash
Generating Unit (CGU), and the models
approach to incorporating risks into the
cash flows or discount rates.
We involved valuation specialists to
supplement our senior audit team members
in assessing this key audit matter.
Our procedures included:
• We considered the appropriateness of the value in use
method applied by the Group to perform the annual
impairment test of goodwill and indefinite life
intangible assets against accounting standard
requirements.
• We assessed the integrity of the value in use models,
including the accuracy of the underlying calculation
formulas.
• We assessed the accuracy of previous Group forecasts
to inform our evaluation of forecasts incorporated in
the models.
• We considered interdependencies of key assumptions
when performing sensitivity analysis of the models by
varying key assumptions, such as forecast operating
cash flows, terminal growth rates and discount rates,
within a reasonably possible range. We did this to
identify those CGUs at higher risk of impairment and to
focus our further procedures.
• Working with our valuation specialists we
independently developed a discount rate range
considered comparable using publicly available market
data for comparable entities, adjusted by risk factors
specific to the Group and the industry it operates in.
• We challenged the Group’s significant forecast
operating cash flows and terminal growth rate
assumptions in light of the expected continued
economic uncertainty. We compared key events to the
Board approved plan and strategy. We applied
increased scepticism to forecasts in areas where
previous forecasts were not achieved. We compared
terminal growth rates to published studies of industry
trends and expectations and considered differences for
the Group’s operations. We compared the forecast
commodity prices to published views of market
commentators on future trends seeking authoritative
and credible sources. We used our knowledge of the
Group, their past performance, business and
customers, and our industry experience.
• We assessed the disclosures in the financial report
using our understanding obtained from our testing and
against accounting standard requirements.
Other Information
Other Information is financial and non-financial information in Reliance Worldwide Corporation Limited’s
annual report which is provided in addition to the Financial Report and the Auditor’s Report. The
Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report in accordance with the Corporations Act 2001, including giving a
true and fair view of the financial position and performance of the Group, and in compliance with
Australian Accounting Standards and the Corporations Regulations 2001
• implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the financial
position and performance of the Group, and that is free from material misstatement, whether
due to fraud or error
• assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
121
120
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Reliance Worldwide Corporation Limited for
the year ended 30 June 2024, complies
with Section 300A of the Corporations Act
2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report
in accordance with Section 300A of the Corporations Act
2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 44 to 67 of the Directors’ report for the year ended
30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Vicky Carlson
Partner
Melbourne
20 August 2024
Distribution of equities – ordinary shares
Range
Total
holders
Number
of shares
% of
issued
shares
1 – 1,000
2,198
1,027,705
0.13
1,001 – 5,000
3,239
8,696,851
1.11
5,001 – 10,000
1,241
9,186,736
1.17
10,001 – 100,000
1,011
23,651,683
3.01
100,001 and over
68
742,742,317
94.58
Total
7,757
785,305,292
100.00
The number of shareholders holding less than a marketable parcel of shares was 166.
Largest shareholders
The names of the 20 largest registered holders of ordinary shares are listed below.
Name
Number of
shares held
% of
issued
shares
HSBC Custody Nominees (Australia) Limited
266,891,509
33.99
JP Morgan Nominees Australia Pty Limited
227,857,004
29.02
Citicorp Nominees Pty Limited
135,122,585
17.21
National Nominees Limited
28,964,647
3.69
BNP Paribas Nominees Pty Ltd
22,588,458
2.88
HSBC Custody Nominees (Australia) Limited
9,780,428
1.25
BNP Paribas Noms Pty Ltd
8,305,265
1.06
Palm Beach Nominees Pty Limited
5,519,579
0.70
Reliance Employee Share Investments Pty Limited
3,461,583
0.44
Citicorp Nominees Pty Limited
2,931,479
0.37
HSBC Custody Nominees (Australia) Limited
2,289,841
0.29
First Samuel Ltd
2,240,335
0.29
Netwealth Investments Limited
1,940,426
0.25
Sandhurst Trustees Ltd
1,939,934
0.25
HSBC Custody Nominees (Australia) Limited
1,874,371
0.24
Mr Heath Graham Sharp
1,758,814
0.22
HSBC Custody Nominees (Australia) Limited
1,626,145
0.21
BNP Paribas Nominees Pty Ltd
1,362,606
0.17
BNP Paribas Noms (NZ) Ltd
1,270,498
0.16
Neweconomy Com AU Nominees Pty Limited
1,256,982
0.16
SHAREHOLDER INFORMATION
The information set out below was applicable at 1 August 2024.
Information
Shareholder
123
122
Substantial shareholders
The number of shares held by substantial shareholders at 1 August 2024 was:
Name
Number of
shares held
%
AustralianSuper Pty Ltd
78,218,339
9.90
Aware Super Pty Ltd
67,762,867
8.58
Yarra Capital Management Limited
53,895,906
6.82
FIL Limited
43,508,324
5.51
Vanguard Group
39,515,562
5.00
Buy-back
The Company does not have a current on-market buy-
back. The Company has announced that it will undertake
an on-market buy-back which is expected to commence in
September 2024.
Voting rights
The Company conducts voting at general meetings by poll.
Every shareholder present at a general meeting has one
vote for every fully paid share held when a poll is conducted.
Shareholders entitled to cast two or more votes may appoint
up to two proxies. Where more than one proxy is appointed,
each proxy may be appointed to represent a specific number
or proportion of the shareholder’s votes. If the appointment
does not specify the proportion or number of votes that
each proxy may exercise, each proxy may exercise half of the
shareholder’s votes.
Shareholder enquiries
Shareholders with enquiries about their shareholding
should contact the Company’s share registry:
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnson Street
Abbotsford Vic 3067
T: 1300 850 505 (within Australia)
T: +61 3 9415 4000 (International)
Please mail all share registry correspondence to:
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Please include your Shareholder Reference Number (SRN)
or Holder Identification Number (HIN) in all correspondence
to the share registry.
Shareholder communications
Receiving your shareholder communications electronically is
the best way to stay informed. To change your preferences or
contact details, please go to www.computershare.com.au and
click on the “Login to Investor Centre” icon. Then follow the
prompts.
It is important for shareholders to notify the share registry
in writing promptly of any change of address. As an added
security measure, please quote your Shareholder Reference
Number and your old address.
Investor information
The Company maintains a website at www.rwc.com where
company information is available and a service for any queries
is provided. For further queries, please email the Company at
investorrelations@rwc.com.
Stock exchange listing
Reliance Worldwide Corporation Limited’s ordinary shares
are quoted on the Australian Securities Exchange under the
code “RWC”.
Annual General Meeting
Details of the 2024 Annual General Meeting of Reliance
Worldwide Corporation Limited will be advised in the
Notice of Meeting.
SHAREHOLDER INFORMATION
The information set out below was applicable at 1 August 2024.
Board of Directors
Stuart Crosby, Chair
Heath Sharp, Chief Executive Officer
Christine Bartlett
Russell Chenu
Darlene Knight
Sharon McCrohan
Ian Rowden
Brad Soller
Company Secretary
David Neufeld
Registered office
28 Chapman Place
Eagle Farm, QLD 4009
T: +61 7 3018 3400
F: +61 7 3105 8130
Principal place of business
Level 32, 140 William Street
Melbourne, VIC 3000
T: +61 7 3018 3400
Auditor
KPMG
Tower Two
Collins Square
727 Collins Street
Melbourne Vic 3008
Share registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnson Street
Abbotsford Vic 3067
T: 1300 850 505 (within Australia)
T: +61 3 9415 4000 (International)
W: www.computershare.com.au
Please mail all share registry correspondence to:
Computershare Investor Services Pty Ltd
GPO Box 2975
Melbourne VIC 3001
Website address
www.rwc.com
CORPORATE DIRECTORY
Corporate Directory
125
124
Annual Report
2024
Reliance
Worldwide
Corporation
Limited
Reliance Worldwide
Corporation Limited
28 Chapman Place
Eagle Farm, QLD 4009
ACN 610 855 877