Australian Vintage Ltd · ASX:AVG
Australian Vintage — FY2010 Earnings Presentation
18 slides from Australian Vintage's earnings presentation, Aug 12, 2010
Slide 1: 2009/10 Full Year Results: Profit momentum continues
For personal use only 2009/10 FULL YEAR RESULTS Profit momentum continues 1
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation is general advice, given in good faith and derived from sources believed to be accurate at this date but no warranty of accuracy or reliability is given and no responsibility arising in any other way including by reason of neglige
Slide 3: Today's Agenda
Today’s Agenda For personal use only Top Line Result Market Overview Wine Quality & Innovation FY11 Outlook Questions 3
Slide 4: Top Line Results: Branded sales and lower costs drive profit
Top Line Results: Branded sales and lower costs drive profit For personal use only 1. EBIT (before significant items) up 43% – EBIT up $7.1m to $23.6m 2. Net profit after tax (before significant items) up 89% – Net profit after tax up $3.8m to $8.1m 3. Positive Cash flow – Operating cash flow positi
Slide 5: Continuing pressure on Australian wine industry but signs of balance
Continuing pressure on Australian wine industry but there are signs the industry is moving to balance For personal use only • 2010 vintage marginally less than expected • Industry still needs to deal with prior year vintage excess stock • Australian dollar at historically high levels: particularly G
Slide 6: Simple View of Australian Wine Supply and Demand
Simple View of Australian Wine Supply and Demand Intake 2006 2007 2008 2009 2010 For personal use only Million Tonnes 1.9 1.4 1.8 1.7 1.5 Equivalent million litres 1,387 1,020 1,337 1,248 1,117 Sales (staggered by 1 year)* Domestic million litres 448 428 430 440 450 Export million litres 787 715 752
Slide 7: Long term issues and poor economics forcing transformational change
Long term issues and poor economics now forcing transformational change For personal use only • Major wine companies continuing to reduce grape supply – Non-renewal and/or buying out grower contracts – Selling/exiting vineyards • Plenty of signals to discourage new entrants 7
Slide 8: Australian Vintage responded to industry challenges
Over the last number of years, Australian Vintage responded to industry challenges • Third party growers reduced from 90KT in V2006 to 35KT in V2010 and For personal use only 22KT in V2011. • Exited 5 vineyards (1,400 acres) reducing intake by 7,200T of high cost grapes and decreasing cash costs of
Slide 9: Australian Vintage now intends to focus on branded sales and cash flow
Having responded to the various challenges to our supply and demand balance, Australian Vintage now intends to: For personal use only • continue its focus on branded sales; • continue to control cash flow and expenditure; and • take advantage of its enhanced reputation as a result of the recent dome
Slide 10: Wine Quality and Innovation continue to drive branded sales
Wine Quality and Innovation continue to drive branded sales Full Year Sales Net Dollar Sales ($’000)* For personal use only 2008/09 2009/10 % Change Domestic Wine Branded Bottled 36,698 34,201 (7) Branded Cask 11,401 7,798 (32) Private Label – Bottled 363 151 (58) Private Label – Cask 16,858 21,430
Slide 11: Wine Quality and Innovation
Wine Quality and Innovation For personal use only • Evolving our wine style: – “The Semillon Blanc” – Oaked Sauvignon Blanc – Sparkling Sauvignon Blanc – Lower alcohol products • Making the wine the hero. • Wine quality, innovation and evolving styles have resulted in unprecedented awards success. 1
Slide 12: McGuigan continues to achieve strong growth
AVL’s largest brand, “McGuigan,” continues to achieve strong growth driven by a focus on quality and market momentum following recent major awards For personal use only McGuigan Brand Performance Net 09/10 Performance: Total Net Sales = $68.7m YOY Case Growth = +55% YOY Net Sales Growth = +36% 12
Slide 13: Unprecedented awards success helping drive our business agenda
Unprecedented awards success is helping drive our business agenda; as a business AVL were awarded over 21 trophies across our three core brands For personal use only International Winemaker of the Year – International Wine & Spirit Competition (London) McGuigan Australian Producer of the Year – Inte
Slide 14: Outlook
Outlook For personal use only • Industry remains challenging – Oversupply exists but problem is reducing – Record high Australian dollar – Competition fierce across Australian and overseas markets • Budgeting to deliver positive NPAT growth in financial year 2011 14
Slide 15: Additional Information
For personal use only Additional Information 15
Slide 16: Sales and EBIT Summary
Sales and EBIT Summary 2010 For personal use only Sales $M 2009 2010 Change Value at 2009 Currency Sales 288.3 237.7 ↓ 17.6% 256.9 EBITDA (before Significant items) 24.5 30.7 ↑ 25% EBIT (before Significant Items) 16.5 23.6 ↑ 43% EBIT (after Significant Items) (156.4) 23.7 NPAT (before Significant It
Slide 17: Segment Profitability
Segment Profitability For personal use only Change vs $’000 Results 2009 Results 2010 PY Domestic Wine (13) 4,864 N.M Export Wine 5,073 5,615 11% Cellar Door 598 1,436 140% Domestic bulk wine and processing 9,983 7,925 (21%) Vineyards 815 3,726 357% Unallocated (183,455) (12,715) N.M Total (166,999)
Slide 18: Additional Information – Significant Items to June
Additional Information – Significant Items to 30 June For personal use only 2009 2010 $’000 ’000 Transaction Costs - (3,716) Provision for onerous contracts (73,473) 7,592 Redundancy costs (2,196) - Employment contract payment - (1,491) Impairment of assets (109,700) (4,591) Settlements received 12,