Reliance Worldwide Corporation Limited (ASX:RWC) Updates on US Tariffs and FY25 Trading Outlook
US Tariffs Impact and Mitigation Actions
Reliance Worldwide Corporation Limited (ASX:RWC) is actively mitigating the effects of newly introduced US tariffs by diversifying its product sourcing from China to countries such as Vietnam, Taiwan, Korea, Thailand, and its own facilities in the US, UK, and Australia. The company aims to reduce China-sourced cost of goods sold by approximately 30% in FY25 and eliminate tariff-impacted products from China by FY27. Additionally, RWC is implementing cost reduction measures and price increases in the US market, expecting a net cost impact of US$25 million to US$35 million on FY26 EBITDA.
FY25 Trading Outlook
RWC now projects Americas FY25 external sales to be at the lower end of the previously broad flat range, within a low single digit percentage up or down from FY24. Asia Pacific external sales excluding Holman are expected to increase by low single digits versus prior mid-single digit guidance. EMEA external sales outlook remains unchanged, expected to decline by mid-single digits compared to FY24. Overall, full-year group external sales for FY25 are projected to increase by mid-single digits relative to FY24. Consolidated Adjusted EBITDA margin is expected to be slightly lower than FY24, while operating cash flow conversion remains strong above 90%.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Reliance Worldwide. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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