Australian Vintage Ltd · ASX:AVG
Australian Vintage — FY2013 Earnings Presentation
34 slides from Australian Vintage's earnings presentation, Aug 23, 2013
Slide 1: 2012/2013 Full Year Results
For personal use only 2012/2013 FULL YEAR RESULTS 23rd August 2013 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: Index
Index For personal use only Top Line Result Market Overview Australian Wine Industry Australian Vintage Limited – Business and Results Summary Outlook 3
Slide 4: Top Line Result
For personal use only 4 TOP LINE RESULT
Slide 5: Australian Vintage Maintains Profit and Dividend and Reduces Cost Base
Australian Vintage Maintains Profit and Dividend and Reduces Cost Base For personal use only 1. Net Profit maintained at $7.1 million in difficult trading conditions. 2. Fully franked dividend maintained at 2.6 cents per share. 3. Successful renegotiation of vineyard leases resulting in an annual ca
Slide 6: Reduced Bulk Wine Sales and Strong $AUD Impacts Revenue
Reduced Bulk Wine Sales and Strong $AUD Impacts Revenue For personal use only 1. Sales down by $19.4 million or 8.5% to $208.5 million due mainly to reduced cask wine and bulk wine sales together with the impact of the Australian dollar. 2. UK/Europe sales were down $8.5 million or 8.7% of which red
Slide 7: Market Overview
For personal use only 7 MARKET OVERVIEW
Slide 8: World Industry Conditions
World Industry Conditions For personal use only 1. We believe the industry globally is moving towards balance and entering a new phase of its supply/demand cycle. This will eventually increase industry returns. • Oversupply is decreasing - Global output fell from 26,400 million litres in 2011 to 24,
Slide 9: World Industry Conditions (continued)
World Industry Conditions (continued) Global Wine Supply and Demand For personal use only Note: Provisional 2011 data, 2012 estimates; Area under vine covers all grapes * Consumption figures include c.333m 9L cases of wine used in the production of fortifieds and industrial applications Source: Inte
Slide 10: World Industry Conditions - Summary
World Industry Conditions - Summary For personal use only 1. The global wine industry is cyclical, partially due to the slow supply response. 2. The industry cycle is currently moving towards supply/demand balance. 3. Global area under vine continues to decline. 4. Global consumption growth is begin
Slide 11: Australian Wine Industry
For personal use only AUSTRALIAN WINE INDUSTRY 11
Slide 12: 2013 Vintage
2013 Vintage For personal use only 1. The quality of the 2013 vintage was very good with some parcels of wine arguably higher in quality than the exceptional 2012 vintage. 2. The Australian industry crush increased by more than 10% to 1.83 million tonnes. The 2012 crush was 1.66 million tonnes. 3. T
Slide 13: 2013 Vintage (continued)
2013 Vintage (continued) For personal use only 6. Although the 2013 vintage is above expectations the long term outlook is that the supply and demand will continue to move towards balance. 7. The high AUD, which has negatively impacted profitability of wine companies, has recently reduced by around
Slide 14: Australian Wine Industry - Snapshot
Australian Wine Industry - Snapshot Vineyard Area and Wine Production Wine Grape Crush & Average Price For personal use only Bearing Ha Non bearing Ha Wine production (RHS) Wine grape crush (LHS) Average winegrape price (RHS) '000 Ha million M tonnes $A / tonne 9LE 200 160 2.5 $1,000 140 2.0 $800 15
Slide 15: Business and Results Summary
For personal use only BUSINESS AND RESULTS SUMMARY 15
Slide 16: Australian Vintage continues to respond to Industry Challenges
Australian Vintage continues to respond to Industry Challenges For personal use only 1. Continued focus on Branded sales During the year ended 30 June 2013 sales of the McGuigan brand grew by 10%, Tempus Two by 26% and Nepenthe by 18%. The McGuigan Wines is ranked the World’s 14th most admired wine
Slide 17: Australian Vintage continues to respond to Industry Challenges
Australian Vintage continues to respond to Industry Challenges For personal use only 1. Continued focus on Branded sales (continued) The McGuigan brand continued its growth in both the domestic and export market. Overall, the McGuigan brand increased by 6% in volume to 2.67 million cases. In the dom
Slide 18: Australian Vintage continues to respond to Industry Challenges
Australian Vintage continues to respond to Industry Challenges For personal use only 1. Continued focus on Branded sales (continued) As part of the strategy to grow our brands it is critical that AVL maintains a strong focus on wine quality. During the year AVL was again awarded the White Winemaker
Slide 19: Australian Vintage continues to respond to Industry Challenges: Control Costs
Australian Vintage continues to respond to Industry Challenges For personal use only 2. Control Costs During the year the terms of our leased vineyards with Belvino Investments were renegotiated, resulting in the following benefits:- a) A reduction in the annual lease cost of $4.5 million. This repr
Slide 20: Sales Summary
Sales Summary For personal use only Full Year Sales Dollar Sales ($’000) 2011/12 2012/13 % Change Australasia/North America packaged 79,371 79,903 1 UK/Europe 97,302 88,847 (9) Cellar Door 6,913 6,843 (1) Australasia/North America bulk wine and processing 40,550 29,524 (27) Vineyards 3,826 3,432 (10
Slide 21: Core Business Improving but result impacted negatively due to poor 2012 Vintage
Core Business Improving but result impacted negatively due to poor 2012 Vintage For personal use only $’000 Results 2012 Results 2013 Change $’000 % Australasia/North America packaged 6,353 5,214 (1,139) (18) UK/Europe 7,098 3,350 (3,748) (53) Cellar Door 885 708 (177) (20) Australasia/North America
Slide 22: Domestic and Export
Domestic and Export The Australasia/North America segment contribution declined by $1.1 million due For personal use only to reduced cask sales ($0.3 million) and the impact of higher 2012 vintage costs ($0.7 million). The Australasia/North America bulk wine and processing segment contribution impro
Slide 23: Impact of Foreign Exchange Movements on Results and Business
Impact of Foreign Exchange Movements on Results and Business For personal use only • With approximately 68% of our total export sales in GBP, 9% in Euro and 2% in CAD, AVL’s exposure to exchange rates is significant. The balance of our export sales is in AUD. • The average weighted GBP in 12/13 was
Slide 24: Cash Flow from Operating Activities
Cash Flow from Operating Activities For personal use only 2012 2013 $m $m Operating Activities Receipts from customers 241.4 223.5 Payments to suppliers and employees (217.7) (217.2) Interest and other costs (13.3) (10.9) Other 0.2 0.3 Net cash from operating activities 10.6 (4.3) Investing & Financ
Slide 25: Financial Position
Financial Position For personal use only During the year net borrowings increased by $13.0 million due mainly to an increase in inventory (up $19.7 million) as a result of the larger 2013 vintage. Gearing (net debt to equity) increased from 54% in 2012 to 59% in 2013. The existing banking facility e
Slide 26: Outlook
For personal use only 26 OUTLOOK
Slide 27: Outlook
Outlook • Industry For personal use only – Will remain challenging but there are signs that industry conditions are improving. – Grape production is moving towards balance. – Global demand has grown faster than supply for the past six years. – Competition remains fierce across Australian and oversea
Slide 28: Outlook (continued): Forecast 2014 net Profit
Outlook (continued) For personal use only Forecast 2014 net Profit for Australian Vintage Limited Considering the benefits from the much improved 2013 vintage, the weakening of the Australian $ and the reduced vineyard lease costs we expect our full year net profit (after tax) in 2014 will improve b
Slide 29: Additional Information
For personal use only Additional Information 29
Slide 30: McGuigan Wines
MEGUIGAN WINES Come on
Slide 31: McGuigan Wines global success
McGuigan Wines global success McGuigan Wines international awards success continued throughout FY13… For personal use only International Winemaker of the Year 2012 – International Wine & Spirits Competition • The only winery in the competition's 43 year history to have been awarded ‘world’s best’ th
Slide 32: More than just medals
More than just medals For personal use only With further success across all markets… • McGuigan Black Label Red is the #1 selling red wine by volume in the Australian market. • McGuigan Wines is ranked as the #14 most admired wine brand in the world by leading UK drinks publication • Drinks Internat
Slide 33: Portfolio extensions to drive growth
Portfolio extensions to drive growth New ranges launched in FY13 to drive premiumisation strategy… For personal use only Classic Reserve Expressions Founder’s Series 33
Slide 34: Highly awarded on the world stage
Highly awarded on the world stage Brand Award For personal use only McGuigan Trophy - International Winemaker of the Year International Wine & Spirits Competition Trophy - Australian Producer of the Year International Wine & Spirits Competition Trophy - White Winemaker of the Year International Wine