#1G GWA Group Limited inspire Caroma CLARK dorf Investor Presentation Morgans Conference 13 October 2017 Gainsborough ENTER WITH STYLE API Locksmiths#2Disclaimer This presentation contains non-IFRS financial measures to assist users to assess the underlying financial performance of the Group. The non-IFRS financial measures in this presentation were not the subject of a review or audit by KPMG. G GWA Group Limited inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 2#3Agenda G GWA Group Limited About GWA Summary of Group Strategy Progress on Group Strategy Summary inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 3#4About GWA G GWA Group Limited Page 4#5Strongly re-positioned for growth From Diverse Building Products business spread across numerous segments (Dux, Brivis, Gliderol exited) Diverse business leveraged to building cycle GWA today Clear focus on two segments with strong market positions and market leading brands in $2bn category Strong ability to manage through the cycle ■ Over 50% exposure to ~$900m Renovations and Replacement segment - (less cyclical segment) Business efficiency program in place - ahead of target to remove ~$13-15m in cost savings by FY19 to provide investment and margin resilience G Focus on local product manufacturing Net Debt $176 million (June 2012) Capital investment required for manufacturing operations Focus on customer and consumer markets Collaborative partnerships with exclusive suppliers Net Debt $80m (30 June 2017) Credit metrics in line with investment grade Low capital requirements enhances cash conversion GWA Group Limited inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 5#6Focused business with strong market position G GWA is a leading designer and supplier of branded building fixtures to households and commercial buildings Our business Leading designer and supplier of branded building fixtures focused on Bathrooms & Kitchens and Door & Access Systems ■ Owner and distributor of market leading brands in core categories in over $2 billion addressable market ■ New management team with strong background in consumer markets ■ Listed on ASX; ~A$700 million market capitalisation GWA Group Limited Our Core Brands inspire Caroma dorf CLARK® Gainsborough ENTER WITH STYLE" API Locksmiths inspire Caroma CLARK Our strengths Significant scale across key segments of building sector ■ Enviable reputation within building sector for product quality, technical expertise and superior service ■ Cost efficient long term supply agreements with selected, exclusive. manufacturing partners Experienced senior management team in R&D, design, brand building/customer engagement, supply and distribution dorf ENTER WITH STYLE Gainsborough API Locksmiths Page 6#7Operating model meets local needs with global scale. Our Value Creating Operating Model Consumer insights Product Design Manu- facturing Distribution Solution Expertise Customer Service Research drives consumer and market insights Local design team deliver contemporary Australian styles Local R&D ensures products excel and exceed Australian standards ~500 patents and 1,000 registered designs support IP protection Collaborative, exclusive relationships with specialist expertise in R&D, quality assurance, innovation, design, vitreous china, plastics, production, taps & locksmithing 17 GWA people in China to maintain standards Extensive coverage of merchant channel National Distribution Centre network Significant scale and expert salesforce ~1,100 deliveries per day Ability to add value to customers through: Service solutions Product and category knowledge Quality products easy to install Market-leading product support Commitment to after sales service (66 FTES in team fielding 2,200 calls per day) G GWA Group Limited inspire Caroma CLARK dorf ENTER WITH STYLE Gainsborough API Locksmiths Page 7#8Strong and growing Continuing Operations FY17 Revenue by Division (A$m) FY17 EBIT by Division (A$m)* 96 350 ■Bathrooms & Kitchens ■Door & Access Group Revenue (A$m) 6.3 87.6 ■Bathrooms & Kitchens ■Door & Access Group EBIT (A$m) 460 90 446 80.6 78.3 440 72.8 440 420 400 376 380 75 426 64.5 60 55 399 45 30 15 360 340 FY13 FY14 FY15 FY16 FY17 GWA Group Limited 0 FY13 FY14 FY15 FY16 FY17 G Caroma CLARK *Note: Excludes Corporate. Continuing Operations excluding Brivis Climate Systems, Dux Hot Water and Gliderol Garage Doors divested in FY15/FY16. inspire dorf ENTER WITH STYLE Gainsborough API Locksmiths Page 8#9Strong financial position supports growth through the cycle Metric Net Debt 30 June 2015 30 June 94.8 2016 88.4 30 June 2017 79.8 Leverage Ratio Net Debt/ EBITDA 1.1 1.1 0.9 Interest Cover EBITDA / Net Interest 12.8 14.3 17.1 Gearing Net Debt/ (Net Debt + 24% 22% 20% Equity) G Source: GWA. ■ GWA remains in strong financial position - credit metrics continue to be consistent with investment grade ■ Net debt $80m - reflects strong cash generation ■ Substantial headroom within $225m syndicated banking facility maturing October 2019 ◉ ▪ $113m in undrawn facilities ■ Provides enhanced financial flexibility to invest in strategic growth initiatives through the cycle GWA Group Limited inspire Caroma CLARK dorf Gainsborough API ENTER WITH STYLE Locksmiths Page 9#10Margin resilience through the cycle 555 EBIT (A$m) and margin (%) 14 12 22286 +2 10 90 20 17.8 18.1 17.1 80 16.1 18 80.6 14.6 78.3 70 16 72.8 60 64.5 50 55 40 30 20 4 10 0 0 FY13 FY14 FY15 FY16 FY17 EBIT EBIT Margin % (RHS) GWA focused on maintaining margin resilience through the cycle: ~50% exposure to Renovations and Replacement market - less cyclical than new build market ■ Market share initiatives to grow presence in key end markets ■ Reduced cost base through SG&A and Supply Chain initiatives G GWA Group Limited inspire Caroma ■ Lower fixed vs variable cost base from exit of manufacturing Low capex requirements and strong balance sheet enables continued strong cashflow generation CLARK Source: GWA. Continuing Operations excluding Brivis Climate Systems, Dux Hot Water and Gliderol Garage Doors divested in FY15/FY16. dorf ENTER WITH STYLE Gainsborough API Locksmiths Page 10#11Strong presence in R&R; low exposure to Multi-res B&K revenue by end market (%) D&A revenue by end market (%) Residential 22% Multi- Residential 11% G GWA Group Limited Source: GWA estimates Commercial 15% Commercial 23% Multi-Res 3% Renovation & Replacement 52% Renovation & Replacement 21% inspire Caroma CLARK dorf Residential 53% Gainsborough ENTER WITH STYLE API Locksmiths Page 11#12Summary of Group Strategy G GWA Group Limited Page 12#13Strategy - transformation from push to pull From Push inspire Caroma dorf reece Tradelink Plumbtec BATHROOM KITCHEN & PLUMBING SUPPLIES www.utterstock.com-1774333 m metricon Lend Lease DALE ALCOCK G GWA Group Limited BUNNINGS warehouse mirvac Past: Manufacturing Driven Current: Customer focused Future: Customer and consumer centric inspire Caroma CLARK To Pull dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 13#14G Our strategy on a page Our Mission: To build GWA as the most trusted and respected company in the building sector Corporate Priorities GWA Group Limited Our Purpose: MAKING LIFE BETTER ....... with simple, superior water solutions with a superior range of access and security systems Door & Access Systems Bathrooms & Kitchens Leverage and build on core assets & brands to drive revenue and market share growth GWA Operational Measures Market share, NSV, EBIT, ROFE, DIFOT, NPS, Safety, Engagement Add value to customers through improved insights, analytics and processes Build "fit for future" culture, engagement and capability Build an advantaged Supply Chain to deliver superior NPD, Quality and Service at best cost Maximise Shareholder Value Creation Key Financial Measures NPAT Growth, TSR, ROFE Drive cost out in SG&A and Supply Chain to improve profitability and allow selective reinvestment inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 14#15GWA continuing to grow revenue ahead of the market Focus on building profitable market share in core segments drives top line growth ahead of the market GWA end market exposure' Residential 22% 1 Renovation & Replacement Residential detached house completions Market activity FY17² Overall market remains relatively flat Change (0.2)% (MAT) Strong pipeline remains from lag between approvals and completions Decreased by 5.9% in FY17 (MAT) Multi-Residential 11% Commercial 15% Renovation & Replacement 52% Multi-Residential completions Activity increased Commercial Increased by 29.3% in FY17 (MAT) Increase in aged care, offset by reduced activity in health care Decreased by 2.8% (MAT) Weighted average of end markets up 1.3% dorf Gainsborough ENTER WITH STYLE inspire CLARK GWA Group Limited 1. Source: GWA estimates 2. Source: BIS Shrapnel, GWA estimates Australia market B&K only (FY17 MAT) Caroma API Locksmiths Page 15#16Renovation & Replacement segment remains stable Renovation Activity (A$bn) $bn per quarter, real 2.5 2.0 1.5 1.0 0.5 2.5 2.0 1.5 1.0 0.5 0.0 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 -Alterations & additions work done, real inspire Approvals for alts and adds 0.0 G GWA Group Limited Sources: ABS, ANZ Research Caroma $bn per quarter, real CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 16#17..and expected to remain so as housing turnover below peak Housing sales ('000s) G GWA Group Limited Sources: ABS, ANZ Research S000, 45 40 35 30 20 15 10 5 0 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Number of house sales, Australia 13 14 15 16 17 inspire Caroma CLARK dorf ENTER WITH STYLE Gainsborough API Locksmiths Page 17#18Progress on Group Strategy G GWA Group Limited Page 18#19Continued progress on strategy Strategic priority Leverage and build on core assets & brands to drive revenue and market share growth Add value to customers through improved insights, analytics and processes Build "fit for future" culture, engagement and capability Build an advantaged Supply Chain to deliver superior NPD, Quality and Service at best cost Drive cost out in SG&A and Supply Chain to improve profitability and allow selective reinvestment ■ Progress against priorities Growing share consistently in core segments Strong new product and breakthrough innovation pipeline in FY18 ■ Consumer engagement - concept centres opening (Adelaide and Sydney); digital presence enhanced ■ Clear portfolio direction on core brands: Caroma, Clark and Dorf ■ Joint business plans with major merchants driving agreed targets / initiatives - - Specific customer plans for R&R re product ranging, improved showroom presence Initiatives in place to unlock untapped growth areas - Aged Care, Commercial R&R Employee alignment on values and behaviours to drive strategy Employee engagement strategy - Get, Grow, Keep ■ Sales and Marketing capability build implemented ■ Dual-sourcing progressing for continuity of supply ■ First Asian consolidation hub complete - direct shipping to port Integrated Business Planning focused on inventory management to drive working capital improvement ■ Ahead of target to reduce costs by $13-15m by FY19 Corporate costs down a further 2% GWA Group Limited inspire Caroma CLARK dorf Gainsborough API ENTER WITH STYLE Locksmiths Page 19#20Deliver consistent consumer experience to grow R&R Search Digital touch points Digital Billboard Viral Email Online Ads STAGES RENOVATION JOURNEY PR Radio TV Print G GWA Group Limited Outdoor Landing Page Newsletter Mobile Blog Email Website IM/Chat 3rd Party Sites Blog TRIGGER/ IDEATION RESEARCH זיויזין Direct Mail Word of Mouth Store PROJECT PLANNING CONSTRUCTION COMPLETION RFP Call Center Call Center IVR Promotion on Invoice Physical touch points inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 20#21Consumer concept centres to drive consumer engagement ■ New Consumer Concept Centres in Adelaide and Sydney ■ Seamless consumer experience across physical and digital touch points ■ Optimise brand experience in partner showrooms ■ Adelaide centre to open 18 October 2017 ☐ ■ Sydney (Alexandria) expected to open early 2018 GWA Group Limited inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 21#22Value-add solutions drives improved customer engagement 0 GWA Group Limited Implemented Joint Business Plans with major merchants driving agreed targets and initiatives. ■ Specific customer plans for Renovation and Replacement. including product ranging, improved presence in showrooms and trade counters of major merchants ■Initiatives in place to unlock untapped growth areas in key segments: ▪ Aged Care ■ Commercial R&R market ■ Sales team re-structured focused on core market segments Continued focus on building deeper understanding of customers' business to drive growth Page 22 inspire Caroma CLARK dorf Gainsborough API ENTER WITH STYLE Locksmiths#23New national distribution centre - Prestons G GWA Group Limited 3 3 GE k ■ New national distribution centre for Bathrooms & Kitchens at Prestons, NSW ■ Consolidate B&K's warehouse operations into 31,000 sqm purpose-built facility ■ State of the art warehousing and R&D facilities on-site ■Supported by new warehouse management system ■ Operational in 2018 inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 23#24Summary G GWA Group Limited 123 S Gainsborough Page 24#25Summary GWA significantly re-positioned for growth ■ Clear focus on two core divisions with strong ability to compete in ~$2 billion addressable market ■ Solid financial position supports growth agenda with strong cashflow generation Focus on margin resilience to manage through the cycle ■ Over 50% exposure to ~$900m Renovations and Replacement segment - (less cyclical segment) ■ Low exposure to Multi-Residential segment Significant progress on strategic priorities ■ NPD pipeline focused on R&R segment, consumer experience and digital engagement ■ Joint business planning and product innovation with major customers Supply chain initiatives focused on lower costs, improved service/delivery and supply assurance G GWA Group Limited inspire Caroma CLARK dorf Gainsborough ENTER WITH STYLE API Locksmiths Page 25#26G GWA Group Limited inspire Caroma CLARK dorf Investor Presentation Morgans Conference 13 October 2017 Gainsborough ENTER WITH STYLE API Locksmiths Page 26