Highlights

  • RWC reported FY26 net sales of US$1.306 billion, down 0.7% from the prior corresponding period, while adjusted net sales increased 1.5% in constant-currency terms.
  • Adjusted net profit after tax fell 15.3% to US$125.1 million, while reported NPAT was US$6.3 million after US$103.3 million of post-tax one-off charges.
  • Adjusted EBITDA declined 12.8% to US$242.1 million, with the Margin falling to 18.5% from 21.1%.
  • Operating cash flow reached US$263.4 million and net Debt fell by US$88.2 million to US$243.4 million, while no final FY26 Dividend was declared following Brookfield's proposal.

Reliance Worldwide Corporation (ASX:RWC) reported a challenging FY26, with Earnings affected by US tariffs, higher copper and other input costs, cost Inflation and weaker Demand across important markets.

Net sales were US$1.3056 billion for the year ended 30 June 2026, representing a 0.7% decline from the prior corresponding period. On an adjusted basis, sales increased 1.5% in constant-currency terms after accounting for Tariff refund provisions, changes in the classification of certain customer incentives, discontinued low-margin Canadian product lines and the sale of Manufacturing operations in Spain.

Adjusted net profit after tax was US$125.1 million, down 15.3% from the previous year. Adjusted EBITDA declined 12.8% to US$242.1 million, while the adjusted EBITDA margin decreased to 18.5% from 21.1%.

Reported NPAT was significantly lower at US$6.3 million. The result included US$103.3 million of post-tax one-off charges, primarily associated with restructuring RWC's metals manufacturing operations in Australia.

Tariffs and Costs Pressure Earnings

RWC's operating performance was affected by higher US tariffs, elevated copper costs, lower volumes in the Americas and EMEA and broader cost inflation. The company partly offset these pressures through pricing measures and cost reduction initiatives.

Cost savings during FY26 amounted to US$10 million. The restructuring of APAC metals manufacturing operations also involved manufacturing and distribution site closure costs, fixed-asset impairment, inventory write-offs and a non-cash Impairment of APAC goodwill.

Despite the upfront costs, RWC expects the APAC restructuring to deliver a net reduction in group costs of approximately US$9 million annually from FY28.

Regional Performance and Manufacturing Changes

Underlying sales in the Americas increased despite weaker residential remodelling markets and lower new construction activity in the US. RWC's new Mexican Facility remains scheduled to commence operations by the end of calendar 2026, with the company expecting the site to provide additional manufacturing flexibility and a lower-cost production structure.

Asia Pacific recorded sales growth across both RWC and Holman product categories. The region also progressed the restructuring of its metals manufacturing operations during the year.

EMEA trading conditions remained subdued in the UK, although Continental Europe delivered growth. Product launches in Germany, France and Italy supported the region, while RWC's new assembly facility in Poland began operations in November 2025. The company expects the lower-cost Polish facility to contribute to earnings growth in FY27.

Cash Flow and Debt

Cash generation was a notable feature of the FY26 financial performance. Cash generated from operations was US$263.4 million, with Operating Cash Flow conversion reaching 108.8% of adjusted EBITDA, compared with 97.6% in the prior corresponding period.

The higher cash conversion supported a reduction in net debt of US$88.2 million. Net debt stood at US$243.4 million at 30 June 2026, compared with US$331.6 million a year earlier. Net debt to adjusted EBITDA, including Lease payments, improved to 1.1 times from 1.3 times.

Dividend and Brookfield Proposal

RWC did not declare a final FY26 dividend following receipt of an unsolicited, non-binding indicative proposal from Brookfield Capital Partners LLC, on behalf of its affiliates and managed funds, to acquire the company for A$4.75 per share.

The proposal provides that the Offer Price would be reduced by the cash amount of dividends paid or payable after the proposal date, including any second-half FY26 dividend. RWC has therefore suspended its current on-market share buyback.

If the proposed Acquisition does not proceed, the Board intends to consider declaring and paying a dividend and/or restarting the buyback during calendar 2027 from FY26 earnings.

FY27 Outlook

RWC does not expect a significant improvement in economic conditions across its major end markets during FY27. Geopolitical developments and US trade policies are expected to continue affecting input costs, interest rates and consumer demand.

Against this backdrop, the company expects group sales to increase by mid- to high-single-digit percentages in FY27, supported by new product initiatives and price increases. EBITDA margin is expected to remain broadly consistent with FY26.

Conclusion

RWC's FY26 results reflected pressure from tariffs, input costs, inflation and weaker market conditions, with adjusted NPAT falling 15.3% and adjusted EBITDA declining 12.8%. Reported NPAT was further reduced by US$103.3 million of post-tax one-off restructuring and impairment charges. At the same time, operating cash flow increased relative to EBITDA and net debt fell materially to US$243.4 million. The absence of a final dividend and suspension of the buyback are linked to the unsolicited Brookfield proposal, while FY27 guidance points to mid- to high-single-digit sales growth with an EBITDA margin broadly in line with FY26.