Slide 1: Annual 2017 Results
For personal use only TREASURY WINE ESTATES Annual 2017 Results 17 August 2017
Slide 2: Michael Clarke, Chief Executive Officer
Michael Clarke For personal use only Chief Executive Officer 2
Slide 3: Result headlines
Result headlines1,2,3,4 • For personal use only Reported Net Profit After Tax of $269.1m; up 55% • Reported Earnings Per Share (EPS) of 36.5 cents per share; up 50% • Reported EBITS5 of $455.1m, 36% higher than reported F16 EBITS • All regions delivered EBITS and EBITS margin growth in F17 • EBITS m
Slide 4: Brand and marketing highlights in 2H17: Maison de Grand Esprit
Brand and marketing highlights in 2H17 Introducing TWE’s Luxury French Portfolio – Maison de Grand Esprit For personal use only Simplifying the complex classification structure of French wine for consumers 4 4
Slide 5: Introducing TWE's Luxury French Portfolio
Brand and marketing highlights in 2H17 Introducing TWE’s Luxury French Portfolio – led by Maison de Grand Esprit For personal use only Showcasing the very best of French wine regions – Provence, Burgundy, Rhône, Bordeaux and Champagne Cuvée Maison de Grand Esprit Grand Esprit Provence Burgundy Rhône
Slide 6: Expanded Country-of-Origin portfolio propositions
Brand and marketing highlights in 2H17 Expanded Country-of-Origin portfolio propositions For personal use only TWE secured the right to exclusively import and distribute in China, Baron Philippe de Rothschild’s branded portfolio; led by Mouton Cadet and Escudo Rojo, effective January 2018 Expanded L
Slide 7: Brand and marketing highlights in 2H17
Brand and marketing highlights in 2H17 19 Crimes: Bold product extensions and exciting For personal use only Penfolds: Luxury brand building and global expansion innovation to come Penfolds Expansion of white Penfolds Max’s on Hard Chard The Uprising Augmented Reality1 proprietary bottle wine offeri
Slide 8: Gunther Burghardt, Chief Financial Officer
Gunther Burghardt For personal use only Chief Financial Officer 8
Slide 9: Profit & Loss
Profit & Loss1 EBITS growth and regional contribution Historical EBITS and EBITS margin2 For personal use only A$m $455.1m $317.8m Strong F17 result delivered by profit growth and margin accretion across all regions • EBITS up 43% to $455.1m, driven by volume growth, portfolio premiumisation, supply
Slide 10: Balance Sheet
Balance Sheet1,2 Flexibility to pursue future value accretive opportunities For personal use only A$m F17 F16 Cash & cash equivalents 240.8 256.1 • Net assets up $39.3m on a reported currency basis; adjusting for Receivables 607.9 611.4 movements in foreign currency, the increase was $90.3m Current
Slide 11: Cash flow and net debt
Cash flow and net debt1 Robust cash conversion; in line with guidance range Continued investment in quality and efficient asset base For personal use only A$m (unless otherwise stated) F17 F16 A$m F17 F16 EBITDAS 563.4 441.0 IT spend 14.8 11.5 Change in working capital (67.4) 87.1 Oak purchases 33.5
Slide 12: Inventory analysis
Inventory analysis Premiumised inventory mix; positioning TWE to deliver Inventory at book value split by segment – F17 & F161,2,3 For personal use only continued earnings and margin growth in F19 and beyond • Total inventory increased $138m to $1,712m, reflecting: − $85.5m increase in non-current i
Slide 13: Capital Management
Capital Management Strengthened debt financing structure Disciplined capital management to drive sustainable value For personal use only Optimised debt financing profile in F17 resulting in improved Continued focus on maintaining balance sheet metrics consistent mix, spread and tenor of committed de
Slide 14: Regional presenters and summary & outlook
Angus McPherson | Managing Director, ANZ Tim Ford | Managing Director, Europe, SEAMEA & Global Supply Chain For personal use only Bob Spooner | President, Americas Robert Foye | Chief Operating Officer, Managing Director, North Asia Michael Clarke | Summary & Outlook 14
Slide 15: Australia & New Zealand
Australia & New Zealand ANZ regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m F17 F16 % F16 % Reported currency Constant currency Volume (m 9Le) 7.8 7.8 0.2% 7.8 0.2% NSR (A$m) 591.3 590.7 0.1% 592.3 (0.2)% NSR per case (A$) 75.84 75.88 (0.1)% 76.09 (0.3)% E
Slide 16: Europe
Europe Historical EBITS & EBITS margin performance1 For personal use only Europe regional performance A$m F17 F16 % F16 % Reported currency Constant currency Volume (m 9Le) 9.6 8.4 14.4% 8.4 14.4% NSR (A$m) 354.1 357.7 (1.0)% 312.1 13.5% NSR per case (A$) 36.76 42.46 (13.4)% 37.05 (0.8)% EBITS (A$m)
Slide 17: Americas
Americas Americas regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m F17 F16 % F16 % Reported currency Constant currency Volume (m 9Le) 15.5 15.0 3.1% 15.0 3.1% NSR (A$m) 1,062.0 991.0 7.2% 962.2 10.4% NSR per case (A$) 68.72 66.10 4.0% 64.18 7.1% EBITS (A$m)
Slide 18: Asia
Asia Asia regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m F17 F16 % F16 % Reported currency Constant currency Volume (m 9Le) 3.5 2.4 48.7% 2.4 48.7% NSR (A$m) 394.3 293.2 34.5% 291.9 35.1% NSR per case (A$) 111.70 123.48 (9.5)% 122.93 (9.1)% EBITS (A$m) 15
Slide 19: Summary and outlook
Summary and outlook For personal use only • TWE continues to transition from an agricultural to a brand-led, high performance organisation • A key priority is delivering executional excellence across all regions • On track to deliver at least $100m of run-rate COGS savings from Supply Chain Optimisa
Slide 20: Questions
For personal use only Questions 20
Slide 21: Disclaimer
Disclaimer For personal use only Treasury Wine Estates (TWE) advises that this presentation contains forward looking statements which may be subject to significant uncertainties outside of TWE’s control. No representation is made as to the accuracy or reliability of forecasts or the assumptions on w
Slide 22: Supplementary Information
Supplementary For personal use only Information 22
Slide 23: Appendix 1: Prior year comparative reconciliation
Appendix 1: Prior year comparative reconciliation Group Profit & Loss Balance Sheet For personal use only Final purchase SGARA SGARA Restated Restated $Am (unless otherwise stated) F16 adjustment1 A$m F16 price accounting - F16 Diageo Wine adjustment1 F16 Volume (m 9L cases) 33.6 33.6 Cash & cash eq
Slide 24: Appendix 2: Foreign exchange rate movements & hedging
Appendix 2: Foreign exchange rate movements & hedging F17 constant currency impact F18 EBITS sensitivity and risk management For personal use only CFX Impact relative to prior year (A$m) Currency Primary EBITS Movement Currency Underlying Hedging Total Pair Exposure Sensitivity (A$m) AUD/USD and AUD
Slide 25: Definitions
Definitions For personal use only Term Definition Throughout this presentation, constant currency assumes current and prior period earnings of foreign Constant currency operations are translated and cross border transactions are transacted at current year exchange rates NSR Net sales revenue EBITDAS