Equity raise - Enabling our long- term success 6 April 2020 FULL - - PowerPoint PPT Presentation

FULL YEAR RESULTS_2019 September 2019

Equity raise - Enabling our long- term success

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6 April 2020

FULL YEAR RESULTS_2019 September 2019

Disclaimer

This presentation is dated 6 April 2020 and has been prepared and authorised by Reece Limited (ABN 49 004 313 133) (“Reece”) in connection with:

• a fully underwritten 3 for 55 pro rata accelerated non renounceable entitlement offer of new Reece fully paid ordinary shares ("New Shares") ("Entitlement Offer") to be made under section 708AA of the Corporations Act

2001 (Cth) ("Corporations Act") as modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84 and ASIC Corporations (Disregarding Technical Relief) Instrument 2016/73;

• an institutional placement of New Shares to certain professional and sophisticated investors ("Placement"); and
• a share purchase plan to eligible shareholders in Australia and New Zealand (the "Share Purchase Plan"),

(the Share Purchase Plan, Entitlement Offer and the Placement are, together, the "Offer"). The Entitlement Offer will be made to eligible retail shareholders of Reece ("Retail Entitlement Offer") and eligible institutional shareholders of Reece ("Institutional Entitlement Offer"). NOT AN OFFER This presentation is not a prospectus, product disclosure statement or other disclosure document under Australian law (and will not be lodged with the Australian Securities and Investments Commission (“ASIC”)) or any other

• law. This presentation is for information purposes only and is not an offer or an invitation to acquire the New Shares or any other financial products in any jurisdiction in which, or to any person to whom, it would be unlawful to

make such an offer or invitation. This presentation does not constitute investment or financial advice (nor tax, accounting or legal advice) or any recommendation to acquire New Shares and does not and will not form any part of any contract for the acquisition of New Shares. This presentation may not be distributed or released in the United States. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. The New Shares to be

• ffered and sold under the Offer have not been, and will not be, registered under the U.S. Securities Act of 1933 (the “U.S. Securities Act”) or the securities laws of any state or other jurisdiction of the United States. Accordingly,

the New Shares may not be offered or sold, directly or indirectly, to any person in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any other applicable U.S. state securities laws. Shares issued under the Share Purchase Plan described in this presentation may not be offered or sold, directly or indirectly, to any person in the United States or any person that is acting for the account or benefit of a person in the United States. By accepting this presentation you represent and warrant that you are entitled to receive such presentation in accordance with the above restrictions and agree to be bound by the limitations contained herein. The distribution of this presentation (including an electronic copy) may be restricted by law in certain other countries. You should read the important information set out in the ‘Foreign selling restrictions' in Appendix B to this

• presentation. Failure to comply with these restrictions may constitute a violation of applicable securities laws.

Each recipient of this presentation should make their own enquiries and investigations regarding all information included in this presentation including the assumptions, uncertainties and contingencies which may affect Reece's future operations and the values and the impact that future outcomes may have on Reece. SUMMARY INFORMATION This presentation contains summary information about Reece and its activities which is current only as at the date of this presentation (unless otherwise stated). The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information which a prospective investor may require in evaluating a possible investment in Reece or that would be required to be included in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. Reece's historical information in this presentation is, or is based upon, information that has been released to the Australian Securities Exchange ("ASX"). This Presentation should be read in conjunction with Reece's other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au.

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Disclaimer (cont’d)

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NOT FINANCIAL PRODUCT ADVICE This presentation is for information purposes only and is not financial product advice or investment advice, nor a recommendation to acquire New Shares, will not form part of any contract for the acquisition of New Shares and has been prepared without taking into account the objectives, financial situation and needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek appropriate advice, including financial, legal and taxation advice appropriate to their jurisdiction. PAST PERFORMANCE Past performance and pro forma historical financial information in this presentation is given for illustrative purposes only and should not be relied upon and is not an indication of future performance, including future share price

• information. Historical information in this presentation relating to Reece is information that has previously been released to the market. For further details on that historical information, please see past announcements released to

the ASX. KEY RISKS An investment in Reece is subject to investment risks including possible loss of income and principal invested. Reece does not guarantee any particular rate of return or the performance of Reece. Recipients should read the 'Risk factors' in Appendix A to this presentation for a non-exhaustive summary of the key risks that may affect Reece and its financial and operating performance. FORWARD LOOKING STATEMENTS The information in this presentation is subject to change without notice and Reece is not obliged to update or correct it. This presentation contains statements that constitute "forward-looking statements" . The forward-looking statements include statements regarding Reece’s intent, belief or current expectations with respect to the timetable, conduct and outcome of the Offer and the use of proceeds therefore, statements about the plans, objectives and strategies of the management of Reece, statements about the industry and markets in which Reece operates, statements about the future performance of Reece's business and its financial condition, indicative drivers, forecasted economic indicators and the outcome of the Offer and the use of proceeds. Words such as “will”, “may”, “expect”, “indicative”, “intent”, “seek”, “would”, “should”, “could”, “continue”, “plan”, “probability”, “risk”, “forecast”, “likely”, “estimate”, “anticipate” , “believe”, “aim” or similar words are used to identify forward-looking statements. You are strongly cautioned not to place undue reliance on forward-looking statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by the

• utbreak of COVID-19. Any such statements, opinions and estimates in this presentation speak only as of the date hereof and are based on assumptions and contingencies subject to change without notice, as are statements

about market and industry trends, projections, guidance and estimates. Forward-looking statements are provided as a general guide only. The forward-looking statements contained in this presentation are not indications, guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of which are beyond the control of Reece, its officers, employees, agents and advisers, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Forward-looking statements may also assume the success of Reece's business strategies. The success of any of these strategies is subject to uncertainties and contingencies beyond Reece's control, and no assurance can be given that any of the strategies will be effective or that the anticipated benefits from the strategies will be realised in the period for which the forward looking statements may have been prepared or otherwise. Refer to the 'Risk factors' in Appendix A of this presentation for a non-exhaustive summary of certain key business, offer and general risk factors that may affect Reece. There can be no assurance that actual outcomes will not differ materially from these statements. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements, including (without limitation) the risks and uncertainties associated with the ongoing impacts of COVID-19, the Australian and global economic environment and capital market conditions and other risk factors set out in this

• presentation. Investors should consider the forward-looking statements contained in this presentation in light of those risks and disclosures. The forward-looking statements are based on information available to Reece as at the

date of this presentation. Reece Group | Equity Raising April 2020 3

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Disclaimer (cont’d)

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FORWARD LOOKING STATEMENTS (cont’d) To the maximum extent permitted by law, responsibility for the accuracy or completeness of any forward-looking statements whether as a result of new information, future events or results or otherwise is disclaimed. Reece disclaims any responsibility to update or revise any forward-looking statement to reflect any change in Reece's financial condition, status or affairs or any change in the events, conditions or circumstances on which a statement is based, except as required by law. DISCLAIMER While the information in this presentation has been prepared in good faith and with reasonable care, no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimate, opinions or other information contained in the presentation. Neither the underwriter of the Entitlement Offer and the Placement (“Underwriter”), nor any of the Underwriter's or Reece’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees and agents, have authorised, permitted or caused the issue, lodgement, submission, dispatch or provision of this presentation and none of them makes or purports to make any statement in this presentation and there is no statement in this presentation which is based on any statement by any of them. To the maximum extent permitted by law, Reece, the Underwriter and their respective advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents:

• exclude and disclaim all liability (including, without limitation, for negligence) for any direct or indirect expenses, losses, damages or costs incurred as a result of participation in the Offer or the information in this

presentation being inaccurate or incomplete in any way for any reason; and

• make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this presentation and take no responsibility for any part of this presentation.

The Underwriter and its advisers, affiliates, related bodies corporate, directors, officers, partners, employees and agents (“Underwriter Parties”) take no responsibility for the Offer and make no recommendations as to whether any person should participate in the Offer nor do they make any representations or warranties concerning the Offer, and they disclaim (and by accepting this presentation you disclaim) any fiduciary relationship between them and the recipients of this presentation, or any duty to the recipients of this presentation or participants in the Offer. Determination of eligibility of investors for the purposes of the Offer is determined by reference to a number of matters, including at discretion of Reece or the Underwriter. Reece and the Underwriter Parties disclaim any liability in respect of the exercise of that discretion, to the maximum extent permitted by law. A summary of the key terms of the underwriting agreement between Reece and the Underwriter is provided in Appendix C. FINANCIAL INFORMATION AND REFERENCES TO REECE In this presentation, unless otherwise stated or the context requires otherwise, references to 'dollar amounts', '$', 'AUD' or 'A$' are to Australian dollars. This Presentation includes certain historical financial information extracted from Reece's audited consolidated financial statements for the 6 months ended 31 December 2019 (collectively, the Historical Financial Information). The Historical Financial Information is presented in an abbreviated form insofar as it does not include all the presentation and disclosures, statements or comparative information as required by the Australian Accounting Standards (AAS) and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act. The Historical Financial Information provided in this Presentation is for illustrative purposes only and is not represented as being indicative of the Reece's views on its future financial condition and/or performance. Investors should be aware that certain financial measures included in this presentation are 'non-IFRS financial information' under ASIC Regulatory Guide 230: 'Disclosing non-IFRS financial information' published by ASIC, and are not recognised under AAS or International Financial Reporting Standards ("IFRS"). Such non-IFRS financial information does not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS financial information may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Although Reece believes these non-IFRS financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information included in this presentation. Reece Group | Equity Raising April 2020 4

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Disclaimer (cont’d)

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In this presentation references to 'Reece', 'we', 'us' and 'our' are to Reece Limited and its controlled subsidiaries. A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set

• ut in this presentation.

WITHDRAWAL AND COOLING-OFF Reece reserves the right to withdraw, or vary the timetable for the Offer without notice. Cooling off rights do not apply to the acquisition of New Shares. Reece Group | Equity Raising April 2020 5

Presenters

Peter Wilson

Chief Executive Officer & Managing Director since 2008 25+ years experience at Reece, including roles as General Manager of Operations and Chief Operating Officer Board member since 1997

Gavin Street

Chief Financial Officer 10+ years experience at Reece Former Chief Financial Officer

• f Westpac New Zealand

Reece Group | Equity Raising April 2020 6

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Reece Group | Equity Raising April 2020 7

• Facing a health & economic crisis
• We have a clear response plan to

manage risk

• Equity raise sits alongside:
• Temporary suspension of

dividends

• Managing our business to

enhance liquidity

Living in unprecedented times

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FULL YEAR RESULTS_2019 September 2019

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“The Plumber Protects the Health of the Nation”

Reece Group | Equity Raising April 2020 8

The plumber provides society with essential services including:

• Sanitation
• Clean water
• Hot water
• Heating
• Drainage

FULL YEAR RESULTS_2019 September 2019

Improving the lives

• f our customers and

people by striving for greatness every day

Our purpose and values guide us

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Setting Reece up for long-term success

Build liquidity to manage risk Strengthen

• ur balance

sheet Look after

• ur people and

customers Accelerate

• ur strategy

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Setting Reece up for the future

Reece is taking pre-emptive and decisive action to fortify the balance sheet and position Reece strongly for the future

• Fully underwritten equity offering to raise A$600

million via an Entitlement Offer and Placement

• Non-underwritten Share Purchase Plan
• Temporary suspension of the Company’s

dividend

• Implementation of a range of operational

initiatives in response to COVID-19

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Following the equity offering, Reece’s pro forma net leverage1 as at 31 December 2019 will reduce to 1.9x and total liquidity will increase to A$917 million2 The Wilson Family, Reece’s major shareholder group, is fully supportive of the actions being undertaken and will subscribe for A$170 million of New Shares as part of the equity offering The equity raise will enable Reece to navigate through current market uncertainties from a position of strength Importantly, it provides Reece with greater flexibility to accelerate its growth strategy and to capitalise on

• pportunities

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United States

Growth Platform

Australia & New Zealand

Customised service in a digital landscape

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Our vision remains clear

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A different story for each region - ANZ

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March sales up

• n prior year

YTD in line with PCP Keeping our people & customers safe Providing essential services to customers Online activity in March up 90%

• n PCP

Managing NZ impact, during stage 4 restrictions Supply chain solid Stock position normal Plumbing & construction an essential service in AU

FULL YEAR RESULTS_2019 September 2019

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A different story for each region - US

Reece Group | Equity Raising April 2020 14

March sales up on prior year Plumbing & construction considered an essential service Agile and adaptive leadership team First 9 months of FY20 on track Opportunity to grow & cement our position beyond COVID- 19 Supporting

• ur customers

in the Sun-Belt Supply chain solid Stock position normal

FULL YEAR RESULTS_2019 September 2019

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Protecting our customers, people and business

Reece Group | Equity Raising April 2020 15

Acted Early Best Practice approach Containment and productivity

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FULL YEAR RESULTS_2019 September 2019

Home Comfort

Providing essential services in a time

• f crisis

Online Access Hot Water Repair, Maintenance & Infrastructure

Reece Group | Equity Raising April 2020 16

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FULL YEAR RESULTS_2019 September 2019

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Securing our role for decades to come

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The plumber’s role is more important than ever

Reece Group | Equity Raising April 2020 18

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FULL YEAR RESULTS_2019 September 2019

Strengthened balance sheet with enhanced liquidity

Equity raising significantly strengthens the balance sheet and enhances liquidity Total pro forma liquidity (cash on hand plus committed undrawn facilities) as at 31 December 2019 increased to A$917 million1 Total pro forma liquidity at completion of the equity raising expected to be in excess of A$950 million Pro forma net leverage2 (net debt / CY19 EBITDA) reduced to 1.9x Covenant-lite financing arrangements; core drawn debt consists of a US Term Loan B facility maturing in 2027

As at 31-Dec-19 Impact of the Offer Pro forma (31-Dec-19) (A$m) Committed Drawn Drawn Drawn Syndicated Revolver Facility due 2023 214 – – – USD TLB due 2027 1,738 1,738 1,738 1,738 Total Debt 1,952 1,738 1,738 1,738 Cash & equivalents1 – 103 600 703 Net debt / (cash) 1,635 1,138 1,035 Total liquidity1 317 600 917 Leverage ratio2 3.0x 1.9x

Pro forma liquidity and capitalisation1,2

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Detail of the Equity Raising

Offer structure and size

• Fully underwritten 3 for 55 accelerated non-renounceable entitlement offer (“Entitlement Offer”) to raise approximately

A$232 million, a fully underwritten A$368 million Placement (“Placement”), and a non-underwritten Share Purchase Plan

• Approximately 79 million New Shares to be issued (equivalent to approximately 14.1% of existing Shares on issue)1

Offer price

• Equity raising will be conducted at A$7.60 per New Share (“Offer Price”), representing a:
• 12.5% discount to last traded price of A$8.69 on Friday, 3 April 2020
• 11.2% discount to TERP2 of A$8.56 (including Placement)

Use of proceeds

• Proceeds from the equity raising will be used to enhance balance sheet flexibility, support the business during the current

macro-economic uncertainty and materially increase liquidity and reduce net debt

Placement and Entitlement Offer

• Institutional Entitlement Offer and Institutional Placement will be conducted on 6 April 2020
• Retail Entitlement Offer opens 15 April 2020 and closes on 24 April 2020

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Reece Group | Equity Raising April 2020 20

Share Purchase Plan

• Non-underwritten Share Purchase Plan
• Eligible shareholders in Australia and New Zealand will be invited to apply for up to A$30,000 of New Shares free of any

brokerage, commission and transaction costs

• The price for the Share Purchase Plan will be the Offer Price

FULL YEAR RESULTS_2019 September 2019

Detail of the Equity Raising (cont’d)

Ranking

• New Shares issued will rank equally with existing Shares

Shareholder participation

• The Wilson Family, Reece's major shareholder group, is fully supportive of the equity raising and will subscribe for A$170

million of New Shares as part of the equity raising

• The various Wilson Family shareholders will be offered participation in the retail component of the Entitlement Offer

(equal to A$170 million)

• The current structure of the Wilson Family's registered shareholdings makes it impractical for them to participate in the

Entitlement Offer by taking up their entitlements directly. As a result, the Wilson Family's participation in the Entitlement Offer will come by way of a A$170 million sub‐underwriting commitment as "sub‐underwriters of last relief", so that the first A$170 million of any shortfall under the retail component of the Entitlement Offer will be taken up by the Wilson Family sub-underwriters. No fees are payable to the Wilson Family entities acting as sub-underwriters

• Each of the three Wilson Family sub-underwriters is an entity controlled by a different Wilson Family member – L.A.

Wilson, J. G. Wilson and B.W.C. Wilson

• The combination of the Placement and Entitlement Offer, and the participation of the Wilson Family in the Entitlement

Offer, will result in the aggregate holding of the various Wilson Family shareholders reducing from 73.3% to 67.7%

Underwriting

• The Entitlement Offer and Placement are fully underwritten by J.P. Morgan Securities Australia Limited
• The Share Purchase Plan is not underwritten

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Indicative timetable

Event Date Record date for SPP 7:00pm (Sydney time), Friday, 3 April 2020 Trading halt, announcement of the Equity Raising, Institutional Entitlement Offer and Placement opens Monday, 6 April 2020 Institutional Entitlement Offer closes Monday, 6 April 2020 Institutional Placement closes Monday, 6 April 2020 Announcement of results of Institutional Entitlement Offer and Institutional Placement Tuesday, 7 April 2020 Trading halt lifted – shares recommence trading on ASX on an “ex-entitlement” basis Tuesday, 7 April 2020 Record Date for Entitlement Offer (7pm) Wednesday, 8 April 2020 Retail Entitlement Offer opens and Retail Offer Booklet (including Entitlement and Acceptance Form) despatched Wednesday, 15 April 2020 SPP Offer opens and SPP Offer Booklet (including Acceptance Form) despatched Wednesday, 15 April 2020 Settlement of Institutional Entitlement Offer and Institutional Placement Friday, 17 April 2020 Allotment and commencement of trading of New Shares issued under Institutional Entitlement Offer and Institutional Placement Monday, 20 April 2020 Retail Entitlement Offer and SPP Offer closes Friday, 24 April 2020 Announcement of results of Retail Entitlement Offer and SPP Offer Wednesday, 29 April 2020 Settlement of New Shares under Retail Entitlement Offer and SPP Offer Thursday, 30 April 2020 Allotment of New Shares under Retail Entitlement Offer Friday, 1 May 2020 Commencement of trading of New Shares issued under Retail Entitlement Offer Monday, 4 May 2020 Dispatch of holding statements in respect of New Shares issued under Retail Entitlement Offer Monday, 4 May 2020 Allotment of New Shares under SPP Offer Monday, 4 May 2020 Commencement of trading of New Shares issued under SPP Offer Tuesday, 5 May 2020 Dispatch of holding statements in respect of New Shares issued under SPP Offer Tuesday, 5 May 2020

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Reece Group | Equity Raising April 2020 22

FULL YEAR RESULTS_2019 September 2019

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Our position is solid and will set us up for the long-term

Build liquidity to manage risk Strengthen

• ur balance

sheet Look after our people and customers Accelerate

• ur strategy

Reece Group | Equity Raising April 2020 23

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Appendices

24 Reece Group | Equity Raising April 2020

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FULL YEAR RESULTS_2019 September 2019

Appendix A Appendix B Appendix C

Risk factors Foreign selling restrictions Underwriting agreement summary

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Reece Group | Equity Raising April 2020 25

FULL YEAR RESULTS_2019 September 2019

Appendix A: Risk factors

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This section discusses some of the key risks associated with any investment in Reece together with the general risks and risks relating to the participation in the Offer, which may affect the future

• perating and financial performance of Reece and the value of Reece shares. The risks set out below are not listed in order of importance and do not constitute an exhaustive list of all the risks

involved with an investment in Reece. Before investing in Reece, you should be aware that an investment in Reece has a number of risks, some of which are specific to Reece and some of which relate to listed securities generally, and many of which are beyond the control of Reece. Before investing in New Shares, you should consider whether this investment is suitable for you. Potential investors should consider publicly available information on Reece (such as that available on the websites of Reece and ASX), carefully consider their personal circumstances and consult their stockbroker, solicitor, accountant or other professional adviser before making an investment decision. You should note that the occurrence or consequences of many of the risks described in this section are partially or completely outside the control of Reece, its directors and management. Further, you should note that this section focuses on the potentially key risks and does not purport to list every risk that Reece may have now or in the future. It is also important to note that there can be no guarantee that Reece will achieve its stated objectives or that any forward looking statements or forecasts contained in this Presentation will be realised or otherwise eventuate. All potential investors should satisfy themselves that they have a sufficient understanding of these matters, including the risks described in this section, and have regard to their own investment objectives, financial circumstances and taxation position. Specific risks of an investment in Reece Impact of COVID-19 Reece has observed that in response to COVID-19 a growing number of governments globally are imposing restrictions on the movement of its citizens and limiting non-essential services and

• activities. Governments around the world are also recommending or enforcing restrictions on domestic and international travel in order to slow the spread of COVID-19. Given the high degree of

uncertainty surrounding the extent and duration of COVID-19, it is not currently possible to assess the full impact of COVID-19 on Reece’s business. However a prolonged reduction in construction and maintenance activity across the business’ key markets (particularly across Australia, New Zealand and the US) will materially adversely impact Reece’s financial performance and profitability. A number of aspects of Reece’s business may also be directly or indirectly affected by government, regulatory or health authority actions, work stoppages, lockdowns, quarantines and travel restrictions associated with COVID-19, including: disruption to Reece’s supply chain and workforce, particularly availability of products and logistics (including shipping of raw materials and finished goods) and government imposed shut-downs of manufacturing and distribution centres affecting supply of products to customers.

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Appendix A: Risk factors (cont’d)

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Impact of COVID-19 (cont’d) As a result of stage 4 restrictions in New Zealand (Reece's smallest market), more than half of Reece's branches in New Zealand have closed with the remaining branches supplying only essential services (which has led to a material reduction in sales in New Zealand since the stage 4 restrictions commenced). No such restrictions are currently in place in Australia or the US. If restrictions similar to those in New Zealand were introduced in Australia or the US, this would lead to a material reduction in sales in those markets and would have a material adverse impact on Reece's financial performance for at least the period of those restrictions. While Reece expects it will have robust liquidity to deal with the circumstances relating to COVID-19 as a result of the Offer, there is a risk that if the duration of events surrounding COVID-19 are prolonged, Reece may need to take additional measures in order to respond appropriately. There are also other changes in the domestic and global macroeconomic environment associated with the events relating to COVID-19 that are beyond the control of Reece and may be exacerbated in an economic recession or downturn. These include, but are not limited to: i. changes in inflation, interest rates and foreign currency exchange rates; ii. changes in employment level and labour costs; iii. changes in aggregate investment and economic output; and iv.

• ther changes in economic condition which may affect the revenue or costs of Reece.

Competition Reece operates in a business environment which remains highly competitive. This competitive environment can be significantly affected by local market forces, such as new market entrants, and changes in economic conditions and product demand. Any increased competition from new and existing competitors can impact on Reece's ability to generate sales, lead to a loss of market share, and cause a decline in profitability. Such changes to the competitive environment in which Reece operates may have an adverse impact on Reece's financial position, performance and prospects. Reputation risk A decline in the high level of loyalty and trust that the Company enjoys with its customers could compromise its position in Australia, New Zealand and the US and adversely affect the Company

• perating and financial performance. This could occur as a result of a wide range of factors or events, including:

i. a loss or erosion of the Company's reputation for price leadership and high levels of customer service; ii. a failing / product liability incident in relation to the Company’s private label offerings; iii. a major information security breach of the Company's IT systems; iv. a major workplace health and safety incident or customer injury occurring in the Company’s stores; or v. a significant breach of regulatory or legislative requirements.

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Appendix A: Risk factors (cont’d)

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Counterparty risk There is a risk that counterparties (including customers) may fail to meet their contractual obligations (particularly to the extent that the relevant counterparties are facing financial distress, including as a result of COVID-19) resulting in financial loss to Reece and impacting on Reece's business relationships and operations. Reece cannot guarantee that its counterparties will fulfil these obligations or that Reece will successfully manage counterparty credit risk. While Reece holds insurance products to insure credit related losses with policy specifications and insured limits that Reece considers are customarily carried for similar businesses, the failure of customers to meet their financial obligations to Reece may adversely impact on Reece's revenue and the financial position, performance and prospects of Reece. Third party suppliers Reece's ability to provide services and products is highly dependent on securing products from third party suppliers. Some of these third party suppliers are key competitors of Reece. The business of Reece would be materially impacted if any of those suppliers were unwilling or unable to provide products as contracted or made a decision to supply products on unfavourable terms (including as a result of the circumstances relating to COVID-19). If suppliers failed to supply the products, terminated the contracts connected with the supply of products (or allowed them to expire without renewing them) or changed terms to be less favourable than those currently offered, and Reece was unable to arrange for the supply of replacement products from another supplier

• n similar terms, this change may materially impact the financial position, performance and prospects of Reece.

Key brands Reece's success in generating profits and increasing its market share is based on the success of the key brands that it distributes and sells. These include third party branded products as well as products marketed under its own 'Reece' private label. Reliance on key brands makes Reece vulnerable to brand damage from negative publicity, product tampering or recalls, material delays in the supply of the key brands of such products and services to customers (including in connection with COVID-19) which may increase the risk of stock and asset write downs. Supply chain and Information technology risks Disruptions to Reece's supply chain may have a material adverse effect on the productivity and results of Reece's operations during the affected period. Any material damage or disruption to Reece's supply chain (including as a result of COVID-19) will impair Reece's ability to provide products and services and result in significant disruption to the business and Reece's customers.

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Appendix A: Risk factors (cont’d)

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Supply chain and Information technology risks (cont’d) In addition, Reece could be adversely impacted by technical malfunctions or employee errors, cyber attacks, viruses and other forms of cybercrime, such as attempts by hackers to gain access to

• r damage Reece's systems and databases. This could cause delays, failures and faults in Reece's supply chain, and cause billing issues and problems for Reece's customers. Any damage to

Reece's information technology systems could lead to extended downtime of Reece's retail websites or corporate systems. This could adversely affect Reece's operations and financial position, reputation, performance and prospects. Regulatory risk and changes in law Changes in the structure and regulation of the industries in which Reece operates in Australia, New Zealand and the US and elsewhere could materially affect Reece and its business. Changes to government policy, law or regulations, or the introduction of new regulatory regimes (for example, in relation to responses to COVID-19 or climate change), may lead to an increase in operational costs and may have a materially adverse effect on the operations, financial performance and prospects of Reece. Failure to comply with applicable laws and regulations may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include civil or criminal fines or penalties. New technologies / industry change Markets in which Reece competes, including bathroom, plumbing and HVACR products and services, may be subject to disruptive change from new technologies. If Reece is not able to develop

• r access new technologies and anticipate or respond to disruptions in the markets in which Reece competes, including if there are new or improved products that are (or are perceived) to be

superior to those of Reece, then Reece may suffer a decrease in the demand for its goods and services, which may have a material adverse effect on results of Reece's financial position, performance and prospects. Security of privacy of data The protection of customer, employee, third party and company data is critical to Reece's operations. Reece has access to a significant amount of customer, employee and third party information, including through its database of customers. The legal and regulatory environment surrounding information security and privacy is increasingly complex and demanding. Customers, employees and third parties such as suppliers also have an expectation that Reece will adequately protect their personal information. A breach of customer, employee, third party or company data could attract significant media attention, damage Reece's reputation and customer or supplier relationships and ultimately result in lost sales, penalties or litigation. This could have a material adverse effect on Reece's future financial position, performance and prospects.

29 Reece Group | Equity Raising April 2020

FULL YEAR RESULTS_2019 September 2019

Appendix A: Risk factors (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Retention of key personnel Reece is dependent upon a number of key management personnel and executives to manage the day to day requirements of the business. The loss of the services of one or more key management personnel could have an adverse effect on Reece. Reece's ability to operate effectively depends in large parts on the efforts of these individuals. Reece will face competition for qualified personnel, and there can be no assurance that it will be able to attract and retain such personnel. Future dividends and franking No assurance can be given in relation to the payment of future dividends. Future determinations as to the payment of dividends by Reece will be at the discretion of the directors and will depend upon the availability of profits, the operating results and financial condition of Reece, future capital requirements, covenants in relevant financing agreements, general business and financial conditions and other factors considered relevant by the directors (including, the current impact of COVID-19 on global economic conditions). No assurance can be given in relation to the level of franking of future dividends. Franking capacity will depend upon the amount of Australian tax paid in the future, the existing balance of franking credits and other factors. Foreign exchange risk Reece has significant operations in Australia, New Zealand and the US, which includes interest bearing liabilities, net investments and other transactions denominated in currencies other than Australian Dollars. Reece is therefore exposed to the macro economic conditions in those regions and to movements in various foreign currencies (in particular, to movements in A$:US$ and A$:NZ$ dollar exchange rates), including in connection with COVID-19. As part of its approach to managing these risks, Reece utilises a natural hedge (debt of Reece is denominated in US dollars (with the exception of some immaterial Australian facilities), and so receipts from operations in the US will to an extent offset the Company's US debt obligations), and Reece also has foreign exchange hedging instruments and cross-currency interest rate swaps in place in order to partially manage against short to medium term currency fluctuations. Interest rate and access to capital risk Reece is subject to the risk of rising interest rates associated with interest bearing liabilities with variable interest rates where interest rate movements can impact Reece's cash flow exposures. Reece seeks to manage part of its exposure to adverse fluctuations in floating interest rates through interest rate hedging arrangements, including derivative financial instruments such as interest rate swaps and cross currency interest rate swap contracts. Such arrangements involve risk, such as the risk that counterparties may fail to honour their obligations under these arrangements, and that such arrangements may not be effective in reducing exposure to movements in interest rates. To the extent that Reece does not hedge effectively (or at all) against movements in interest rates, such interest rate movements may adversely affect Reece's results.

30 Reece Group | Equity Raising April 2020

FULL YEAR RESULTS_2019 September 2019

Appendix A: Risk factors (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Interest rate and access to capital risk (cont’d) Reece may need to access additional debt finance or capital to fund its operations. However, developments in global financial markets, such as the impact of COVID-19, may adversely affect the liquidity of global credit markets and Reece's access to those markets. If Reece is unable to access capital, or refinance, repay or renew its debt facilities or otherwise obtain debt finance on favourable terms, this may have a material adverse effect on Reece's future financial position, performance and prospects. Litigation risk. Disputes or litigation may arise from time to time in the course of the business activities of Reece. There is a risk that any material or costly dispute or litigation could adversely affect Reece's reputation, financial position, performance or prospects. Insurance risk Although Reece maintains insurance coverage that it believes is appropriate to protect against major operating and other risks, not all risks are insured or insurable. Reece cannot be sure that adequate insurance coverage for potential losses and liabilities will be available in the future on commercially reasonable terms, and may also carry large deductibles and premiums. If Reece experiences a loss in the future, the proceeds of the applicable insurance policies, if any, may not be adequate to cover replacement costs, lost revenues, increased expenses or liabilities to third

• parties. This may have a materially adverse effect on Reece's financial position, performance and prospects.

Taxation risks Future changes in Australian taxation law, including changes in interpretation or application of the law by the courts or taxation authorities in Australia, may affect the taxation treatment of an investment in Reece shares or the holding and disposal of those shares. Further, changes in tax law, or changes in the way tax law is expected to be interpreted, in the various jurisdictions in which Reece operates (in particular, Australia, the US and New Zealand), may impact the future tax liabilities of Reece. In addition, an investment in shares involves tax considerations which may differ for each investor. Investors are encouraged to seek professional tax advice in connection with any investment in Reece. Changes to Accounting standards The Australian Accounting Standards are set by the Australian Accounting Standards Board (AASB). Changes to accounting standards issued by AASB could materially adversely affect the financial position and performance reported in Reece's financial statements.

31 Reece Group | Equity Raising April 2020

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Appendix A: Risk factors (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

General and Offer Risks Risks associated with an investment in shares There are general risks associated with investments in equity capital such as Reece shares. The trading price of Reece shares may fluctuate with movements in equity capital markets in Australia and internationally. This may result in the market price for the New Shares being less or more than the Offer Price. Generally applicable factors which may affect the market price of Reece shares include: i. the impact of COVID-19 (or other pandemics or epidemics), including prolonged reduction in construction and maintenance activity across the business’ key markets and on Reece's workforce, industry, customers and supply chains, including as a result of governmental action, work stoppages, lockdowns, quarantines, travel restrictions and the impact on the economics and share markets of the key markets in which Reece operates; ii. general movements in Australian and international stock markets; iii. investor sentiment; iv. Australian and international economic conditions and outlook; v. changes in interest rates and the rate of inflation; vi. changes in government legislation and policies, including taxation laws;

• vii. loss of key personnel and delays in replacement;
• viii. announcement of new technologies;

ix. epidemics or pandemics such as COVID-19; x. geo political instability, including international hostilities and acts of terrorism, the response to COVID-19 and travel restrictions; xi. demand for and supply of Reece shares;

• xii. announcements and results of competitors; and
• xiii. analyst reports.

No assurances can be given that the New Shares will trade at or above the Offer Price. None of Reece, its directors or any other person guarantees the market performance of the New Shares. The financial position, performance and prospects of Reece and Reece's share price may be adversely affected by the worsening of general economic conditions in Australia (including, the adverse impacts of, and the responses to, COVID-19), as well as international market conditions and related factors. It is also possible new risks might emerge as a result of Australian or global markets experiencing extreme stress, or existing risks may manifest themselves in ways that are not currently foreseeable.

32 Reece Group | Equity Raising April 2020

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Appendix A Appendix B Appendix C

Risk factors Foreign selling restrictions Underwriting agreement summary

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 33

FULL YEAR RESULTS_2019 September 2019

Appendix B: Foreign selling restrictions

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 34

This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitted below. Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (the "SFO"). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than to "professional investors" (as defined in the SFO and any rules made under that ordinance). No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors. No person allotted New Shares may sell, or offer to sell, such securities in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such securities. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents

• f this document, you should obtain independent professional advice.

New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The New Shares are not being offered to the public within New Zealand other than to existing shareholders of the Company with registered addresses in New Zealand to whom the offer of these securities is being made in reliance on the FMC Act and the Financial Markets Conduct (Incidental Offers) Exemption Notice 2016. Other than in the entitlement offer, the New Shares may only be offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) to a person who:

• is an investment business within the meaning of clause 37 of Schedule 1 of the FMC Act;
• meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act;
• is large within the meaning of clause 39 of Schedule 1 of the FMC Act;
• is a government agency within the meaning of clause 40 of Schedule 1 of the FMC Act; or
• is an eligible investor within the meaning of clause 41 of Schedule 1 of the FMC Act.

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Appendix B: Foreign selling restrictions (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 35

Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA. This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) an "accredited investor" (as defined in the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore. Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended ("FSMA")) has been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of the FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) of the FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of the FSMA does not apply to the Company.

FULL YEAR RESULTS_2019 September 2019

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 36

United Kingdom (cont’d) In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 ("FPO"), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely

• n this document or any of its contents.

Appendix B: Foreign selling restrictions (cont’d)

FULL YEAR RESULTS_2019 September 2019

Appendix A Appendix B Appendix C

Risk factors Foreign selling restrictions Underwriting agreement summary

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 37

FULL YEAR RESULTS_2019 September 2019

Appendix C: Underwriting agreement summary

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 38

Reece has entered into an underwriting agreement with the Underwriter (Underwriting Agreement), pursuant to which the Underwriter has agreed to fully underwrite the Entitlement Offer and the Placement on the terms and conditions of the Underwriting Agreement. The Underwriter’s obligations under the Underwriting Agreement, including to manage and underwrite the Entitlement Offer and the Placement, are conditional on certain matters, including Reece delivering certain shortfall certificates, sign-offs and opinions. Further, if certain events occur, some of which are beyond the control of Reece, the Underwriter may terminate the Underwriting

• Agreement. Termination of the Underwriting Agreement would have a materially adverse impact on the total amount of proceeds that could be raised under the Entitlement Offer and the

Placement. The Underwriter may terminate its obligations under the Underwriting Agreement on the occurrence of the following events:

• the conditions precedent in the Underwriting agreement (including delivery by Reece to the Underwriter of a due diligence questionnaire) are not satisfied or waived by their respective

deadlines;

• a statement contained in the Offer materials, including in this Presentation, is or becomes misleading or deceptive (including by omission) or likely to mislead or deceive, or the Offer

materials omit any information they are required to contain, or the issue or distribution of the Offer materials, or the conduct of the Offer, is misleading or deceptive or likely to mislead to deceive;

• in the reasonable opinion of the Underwriter, an obligation arises on Reece to give ASX a notice in accordance with sections 708AA(10), 708AA(12) (as included in the Corporations Act by

ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84) or 709A(9) of the Corporations Act;

• any government agency commences, or gives notice of an intention to commence, any investigation, proceedings or hearing in relation to the Offer or the Offer materials, or prosecutes or

commences proceedings against or gives notice of an intention to prosecute or commence proceedings against Reece;

• ASX announces that Reece will be removed from the official list, or that the Shares will be removed from official quotation or suspended from quotation by ASX for two or more trading days

for any reason other than a trading halt in connection with the Offer;

• approval (subject only to customary conditions) is refused or not granted to the official quotation of all the shares to be issued in connection with the Offer on ASX, or if granted, the approval

is subsequently withdrawn, qualified (other than by customary conditions) or withheld

• any event specified in the timetable for the Offer which is scheduled to occur:
• n or prior to 20 April 2020 is delayed for 1 or more than 1 Business Day without the prior written approval of the Underwriter; or
• after 20 April 2020 is delayed for two or more Business Days without the prior written approval of the Underwriter;
• Reece withdraws the Placement and/or the Entitlement Offer or indicates in writing to the Underwriter that it does not intend to, or is unable to proceed with, the Placement and/or the

Entitlement Offer;

FULL YEAR RESULTS_2019 September 2019

Appendix C: Underwriting agreement summary (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 39

• Reece is prevented from allotting and issuing the shares to be issued under the Offer within the times required by the timetable for the Offer, the ASX Listing Rules, applicable laws, an order
• f a court of competent jurisdictions or a government agency;
• any certificate which is required to be provided by Reece under the Underwriting Agreement is not provided when required;
• either:
• Reece is insolvent or there is an act or omission, or circumstance that arises, which is likely to result in Reece becoming insolvent; or
• a related body corporate of Reece is insolvent or there is an act or omission, or circumstance that arises, which is likely to result in a related body corporate of Reece becoming insolvent,

where such insolvency would have a material adverse effect on the Reece group (taken as a whole);

• Reece, any of its directors or the chief executive officer or chief financial officer of Reece is charged in relation to any fraudulent conduct or activity whether or not in connection with the Offer;
• r
• if:
• the ASX/S&P 200 Index falls at any time between the open of trading and the close of trading on date of the Underwriting Agreement (ie, 6 April 2020) by 10% or more from its level at

the close on the last trading day before the date of the Underwriting Agreement (ie, 3 April 2020); and

• by 5.00pm on the trading day after the date of the Underwriting Agreement (ie, by 5.00pm on 7 April 2020), the Underwriter and Reece (both acting reasonably) have been unable agree

amendments to this agreement (including, without limitation, an amendment to the Offer Price) in order to implement a capital raising for the underwritten amount that will enable Reece to raise the underwritten amount. In addition, the Underwriter may terminate its obligations under the Underwriting Agreement on the occurrence of the following events if it has reasonable grounds to believe that the event (a) has

• r is likely to have a material adverse effect on the success, settlement or marketing of the Offer (or any aspect of it) or on the ability of the Underwriter to market or promote or settle the Offer (or

any aspect of it); or (b) will, or is likely to, give rise to a liability of the Underwriter or its affiliates under, or give rise to, or result in, a contravention by the Underwriter or its affiliates or the Underwriter or its affiliates being involved in a contravention of, any applicable law:

• Reece amends any of the Offer materials without the prior written consent of the Underwriter;
• any certificate which is required to be provided by Reece under the Underwriting Agreement is false, misleading, deceptive, untrue or incorrect;
• a representation, warranty or undertaking or obligation contained in the Underwriting Agreement on the part of Reece is breached or is or becomes misleading or deceptive or not true or

correct;

• Reece fails to perform or observe any of its obligations under the Underwriting Agreement;
• the due diligence committee report or any information supplied (including any information supplied prior to the date of the Underwriting Agreement) by or on behalf of Reece to the

Underwriter for the purposes of the due diligence investigations, the Offer materials or the Offer, is or becomes false, misleading or deceptive or is likely to mislead or deceive (including by

• mission);

FULL YEAR RESULTS_2019 September 2019

Appendix C: Underwriting agreement summary (cont’d)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES

Reece Group | Equity Raising April 2020 40

• any adverse change, or an event that is likely to result in an adverse change, occurs in the assets, liabilities, financial position or performance, profits, losses or prospects of Reece and the

Reece group (insofar as the position in relation to an entity in the Reece group affects the overall position of Reece) from those respectively disclosed in any Offer materials, or as most recently disclosed to ASX by Reece prior to the date of this agreement;

• either:
• Reece contravenes any provision of the Corporations Act, its Constitution, any of the ASX Listing Rules or any other applicable law; or
• any of the Offer materials or any aspect of the Offer does not comply with the Corporations Act, the ASX Listing Rules, or any other applicable law;
• any of the following occurs: (i) a director, the chief executive officer or chief financial officer of Reece is charged with an indictable offence; (ii) any government agency charges or commences

any court proceedings or public action against Reece or any of its directors in their capacity as a director of Reece, or announces that it intends to take action, or commences or gives notice

• f an intention to commence a hearing or investigation into Reece; or (iii) any director of Reece is disqualified from managing a corporation under the Corporations Act;
• a resignation or termination of the chief executive officer, chief financial officer or chairman of Reece occurs;
• there is introduced, or there is a public announcement of a proposal to introduce, into the Parliament of Australia or any State or Territory of Australia a new law or regulation, or the Reserve

Bank of Australia, or any Commonwealth or State authority (including ASIC), adopts or announces a proposal to adopt a new policy (other than a law, regulation, or policy which has been announced prior to the date of the Underwriting Agreement);

• any of the following occurs:
• trading in all securities quoted or listed on ASX, the London Stock Exchange, the Hong Kong Stock Exchange, the Singapore Stock Exchange or the New York Stock Exchange is

suspended or limited in a material respect for one day on which the exchange is open for trading (Trading Day) or a substantial part of one Trading Day;

• there is a general moratorium on commercial banking activities in Australia, Hong Kong, the United States or the United Kingdom is declared by the relevant central banking authority in

any of those countries, or a disruption in commercial banking or security settlement or clearance services in any of those countries;

• hostilities not presently existing commence (whether war has been declared or not) or a major escalation in existing hostilities occurs (whether war has been declared or not) involving

any one or more of Australia, the United States of America, United Kingdom, any member state of the European Union, Japan, Hong Kong (excluding a recurrence of the recent hostilities, but including any escalation of those recent hostilities, through any military deployment by the People’s Republic of China or otherwise), or the People’s Republic of China, or a major terrorist act is perpetrated on any of those countries or any diplomatic establishment of any of those countries. If the Underwriting Agreement is terminated by the Underwriter, the Underwriter is not obliged to perform its obligations that remain to be performed under the Underwriting Agreement.