Reliance Worldwide Corporation Limited

FY26 reported net sales were down 0.7% year over year; adjusted for tariff refund provisions, customer incentive reclassifications, selected Canadian exits and the Spain manufacturing sale, net sales were up 3% and up 1.5% in constant currency. Adjusted EBITDA was $242.1 million, down 12.8%, and adjusted EBITDA margin was 18.5% versus 21.1% in the prior comparable period. Reported NPAT was $6.3 million, net of $103.3 million post-tax of one-off charges, while adjusted NPAT was $125.1 million, down 15.3%; adjusted EPS was USD 0.165. Operating cash flow was $263.4 million, cash conversion was 108.8% of adjusted EBITDA, and year-end leverage was 1.11x versus 1.3x. For FY27, management guided Americas external sales to mid- to high single-digit growth with EBITDA margin broadly consistent with FY26, APAC external sales to mid-single-digit growth with EBITDA margin broadly consistent with FY26, EMEA external sales to mid-single-digit growth with EBITDA margin improvement, and group sales to mid- to high single-digit growth with adjusted EBITDA margin broadly consistent with FY26. They also target about $10 million to $12 million of additional cost savings in FY27.

Heath Sharp said FY26 was a demanding year because of weak U.S. and U.K. end markets, tariff changes and cost inflation, but emphasized that RWC still advanced manufacturing footprint changes, product transitions and service improvements. He spent significant time on the Brookfield proposal, saying the board weighed the cash certainty, the FY27 outlook, execution risk and macro/geopolitical uncertainty before deciding the AUD 4.75 proposal was attractive enough to enter a due diligence process. His tone was cautious but confident, repeatedly stressing that there is no binding offer yet and that the company’s long-term strategy remains intact.

Andrew Johnson said the main financial pressures were tariff-related margin pressure, softer U.S. and U.K. demand, copper inflation and other input cost increases, partly offset by $10 million in cost reduction initiatives. He highlighted that Americas adjusted EBITDA was $161.4 million, down 11.5%, with tariff costs at the low end of the $25 million to $30 million range and a net tariff refund benefit of $4.2 million, while APAC adjusted EBITDA was A$21.1 million, down 26.7%, and EMEA adjusted EBITDA was down 11.3%. He also pointed to $263.4 million of operating cash flow, 108.8% conversion, $88.2 million of borrowings repaid and year-end leverage of 1.11x, and said FY27 should still carry meaningful inflation and only modest macro recovery, with around $5 million to $7 million of net U.S. tariff impact expected.

Analysts pressed on why the board was willing to engage with Brookfield at AUD 4.75 even after multiple lower bids, and management said the decision reflected a full valuation review that included strategic assets, growth plans, cash generation and FY27 execution risk. Several questions focused on whether the business had structurally changed and whether normalized earnings or margins were lower; Heath Sharp said there was no structural change, just a very different operating environment and near-term volatility. On margins, Andrew Johnson said rebuilding Americas margins will take multiple years, with Mexico, Poland and the move to stainless steel only flowing through more materially in FY28 and beyond.