Diamond Estates Wines & Spirits, Inc. · TSXV:DWS
Diamond Estates Wines & Spirits — Shareholder Meeting (September 2024)
21 slides from Diamond Estates Wines & Spirits's shareholder meeting presentation, Sep 26, 2024
Slide 1: President's Report Annual General Meeting
President’s Report Annual General Meeting September 26, 2024
Slide 2: Important Notice
Important Notice This presentation contains forward-looking statements, which can be identified by the use of the forward-looking terminology, such as but not limited to “may,” “intend,” “will,” “expect,” “anticipate,” “estimate,” “seek,” or “continue” or the negative thereof or other variations the
Slide 3: Diamond Estates Wines & Spirits
Diamond Estates Wines & Spirits Publicly traded on TSX-V under DWS Estates: Lakeview, Creekside, Shiny Apple, Backyard Vineyards + ~30 acres of vineyard - 20 Bees, Fresh, Mindful, D’Ont Poke the Bear (new), East Del, Creekside, Shiny Apple, Red Tractor, Import Agency: Trajectory Beverage Partners Nu
Slide 4: Executive Summary
Executive Summary Diamond is a turnaround story with initial changes nearly complete Financials demonstrating early turnaround results, but not the full impact of acquisitions, structure changes and cost reductions The wineries are leading the turnaround but major changes at the Agency starting to i
Slide 5: A Turnaround Story Becoming a Reality
A Turnaround Story Becoming a Reality Turnaround early indicators: - F24 EBITDA +$1.6M vya - Q1 F25 EBITDA +$0.6M vya - GM increased 7 points in F24 and 8 points in Q1 F25 with improving COGS & VQA Rebate - F25 momentum continues with strong July/August GM growth Acquisitions fueling growth and expe
Slide 6: Government Lobbying and Retail Modernization
Government Lobbying and Retail Modernization Industry lobbying and Retail Modernization deliver five big wins for DWS 1. VQA Rebate enhanced to 50% on all LCBO/Grocery/Convenience sales (+$2.2M in F24; $3M+ in F25). Previous impact of this program ~$200k 2. 6.1% Wine Tax removed for on-site winery s
Slide 7: Debt Pay-Down
Debt Pay-Down Target debt level of $10M (and zero long term) expected by year end - Lassonde $9M equity injection - DONE - QMV $4M sale – DONE - Renaissance ~$2.6M Put Option - DONE - VQA Rebate $2.2M – SECURED - Sale of Backyard Vineyard ~$2.7M – work in progress
Slide 8: Category sales shift to Grocery represents a $9M Retail Revenue opportunity for DWS
Category sales shift to Grocery represents a $9M Retail Revenue opportunity for DWS Modelling Assumptions: - 10% transfer of wine retail revenue from LCBO to Grocery / Convenience (G&C) equates to $210M of $2.1B LCBO wine sales - Maintenance of DWS share advantage in the Grocery channel DWS would ne
Slide 9: Growing through Acquisition & Brand Development
Growing through Acquisition & Brand Development D’Ont Poke the Bear acquisition #2 DWS Brand; utilizes existing winery capacity ~$1.1M EBITDA; additional ~$500k post initial 5 years Multi-channel growth opportunity (DTC, Winery, Grocery) Mindful Wines – first VQA low alc / low sugar wines at LCBO /
Slide 10: Portfolio Refresh
Portfolio Refresh Previous Core Portfolio Current Portfolio refreshed & augmented
Slide 11: Agency re-imagined to strengthen capability and profitability
Agency re-imagined to strengthen capability and profitability The key projects are largely in place with integrations and transitions well underway. Further improvements and growth are expected. Key Projects - Western partnership with Renaissance Wine Merchants with intent to merge nationally – STAG
Slide 12: Ontario Sales by category
Trajectory growing share of import beer and wine categories Ontario Sales by category Imported Beer Wine Spirits Industry -14.1% -3.7% -4.0% Year to Date (YTD) Trajectory +19.7% +5.1% -11.4% Warsteiner focus has made it the VQA and key import brands growing McCormick and Maverick portfolios fastest
Slide 13: Agency New Business Wins
Agency New Business Wins New Business Wins projected to boost annual gross margin $750k
Slide 14: Perigon acquisition adds three powerful retail brands
Perigon acquisition adds three powerful retail brands Brands include wine, beer and spirits with Vidigal, Swinkles and Brock Street as the largest Retail Suppliers
Slide 15: Winery Success Stories
Winery Success Stories Our owned brands continue to thrive and solidify their positions in key categories. EastDell Trending Shiny #1 Ontario Craft Cider Twenty Bees #2 VQA Grocery DPTB Growing +81% R3, +51% R6 Grocery Brand Brand +28% R3, +18% R6
Slide 16: We Make Great Wine – Winning Prestigious Awards
We Make Great Wine – Winning Prestigious Awards Remarkable year for top tier awards: • Lakeview Vidal Icewine wins Best Icewine at International Wine Challenge • Lakeview Sparkling Brut wins Sparkling Wine of the Year • Fresh Rose wins Platinum, most affordable winner at $15.95
Slide 17: Fiscal 2024 Financial Review
Fiscal 2024 Financial Review While P&L demonstrating improving winery results (Revenue +$1.8M; GM +$2.7M), the loss of a major Agency Supplier (-$5M) lead to a $3.2M reduction in Consolidated Revenue Despite reduced consolidated revenue, GM improved $1M (+7 pts) driven by the VQA Rebate and a reduce
Slide 18: Balance Sheet
Balance Sheet Current Assets continued to decline ($1.1M) driven by inventory reductions Other Assets declined $8.3M driven by the sale of Queenston Mile and depreciation Liabilities decreased by $8M driven by term debt repayment Balance Sheet As at March 31, 2022 As at March 31, 2023 As at March 31
Slide 19: Q1 F25 Financial Review
Q1 F25 Financial Review Revenue decreased $1.7M driven by the loss of a major Supplier. The wineries grew $0.4M despite the sale of QMV and $0.6M higher bulk wine sales in the prior year GM decreased more modestly ($0.1M) with an impressive +11.4 pt GM improvement at the wineries leading to a consol
Slide 20: Executive Summary
Executive Summary Diamond is a turnaround story with initial changes nearly complete Financials demonstrating early turnaround results, but not the full impact of acquisitions, structure changes and cost reductions The wineries are leading the turnaround but major changes at the Agency starting to i
Slide 21: This has been a year of significant change in the beverage alcohol industry
This has been a year of significant change in the beverage alcohol industry and for us as a company. I am confident that we are on the right track to take advantage of these industry changes and that we have made difficult and exciting changes to our business that will provide advantage and signific
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