Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Presentation (March 2023)
51 slides from Endeavour's investor presentation, March 2023
Slide 1: Endeavour Group
Endeavour Group ASX: EDV March 2023
Slide 2: Our values
Our values Our ways of working We're real We connect with authenticity and care. We work with spirit We share our passion, knowledge and enthusiasm for what we do. It impacts those around us positively everyday. Creating a more sociable future, together We're inclusive Everyone's welcome. We're team
Slide 3: Contents
Contents Overview of Endeavour pages 4 - 19 Including: Our investment proposition Our market Our strategy Retail pages 20 - 27 Retail Overview Dan Murphy’s BWS Hotels pages 28 - 31 Hotels overview Supporting Capabilities pages 32 - 36 endeavourX Pinnacle Drinks Latest Financial Results pages 37 - 51
Slide 4: Our purpose, vision and strategy: delivering strong returns
Our purpose, vision and strategy: delivering strong returns Operations optimised across Strengthened existing the Group partnerships Grown customer reach Continuously focused on team 🛒 💡 🤝 Continuously focused on sustainability Efficient Partnerships that Leading customer end-to-end grow our…
Slide 5: This is Endeavour Group
This is Endeavour Group Large and engaged customer base Complementary collection of assets Pivotal role in our industry Large customer base Brands Support suppliers and partners ~200m Annual ~4.9m Active loyalty ~3k Number of 730 New supplier interactions members1 suppliers partners Highly engaged D
Slide 6: A strong history of organic and strategic growth
A strong history of organic and strategic growth Retail Hotels Endeavour Group F01 F02 F05 F06 F09 - F11 F12 - F13 F13 F15 F18 F20 F21 F22 BWS brand Joint venture Takeover of ALH Group Acquisition of Acquisition of Woolworths Sale and Acquisition of Acquisition of Established Acquisition of created
Slide 7: Strong returns to shareholders
Strong returns to shareholders Operating cash flow (high cash realisation) Targeting investment grade credit metrics H1 F23 outcomes Dividends Strong financial outcomes reflecting the ● Sustain the core Stay-in-business resilience of the business and effective cost Sustaining Capex ● 70-75% ● ● Tech
Slide 8: The Unique Australian Market: Retail Liquor
The Unique Australian Market Retail Liquor Drinks retail ● Elevated through COVID - Endeavour Retail grew sales in F19-F22 by Size and F16-19 CAGR market size $23b 3% 6% CAGR Growth (revenue)1 (pre-COVID)1 ● The majority of licences to sell packaged liquor are held by independent operators, includin
Slide 9: The Unique Australian Market: Hotels
The Unique Australian Market Hotels Relatively Food Bars ● Stable market pre-COVID; significant impacts through closures Size and Hospitality equal mix of in F20 - F22 market size $19b revenue Growth (revenue)1 drivers Gaming Accommodation ● Strong recovery underway, with F22 EBIT growth of 20.7% Yo
Slide 10: The Australian hotel and our market leading integrated offer
The Australian hotel and our market leading integrated offer Australian hotels are unique in that they offer a variety of BARS GAMING experiences including bars, food, gaming, accommodation and more Tap and drink lists optimised Improved player experience by based on customer data and our reducing t
Slide 11: Our network
Our network 1 262 +4 Dan Murphy’s stores 16 04 53 423 1,434 +17 BWS stores 25 147 136 28 19 95 36 349 +5 Hotels (incl. managed clubs) Key: 02 03 84 392 55 Dan Murphy’s BWS 78 326 85 01 5 Wineries 2 Hotels (incl clubs) Wineries 03 35 05 01 01 3 Bottling facilities Bottling facilities 1. As at 1 Janua
Slide 12: We're well positioned to achieve our vision through combined retail and hotels offerings
We’re well positioned to achieve our vision through the combined retail and hotels offerings 3. Decide to head into 4. Try your luck in the 5. Order and pay for 6. Notice on a media the Forest Hotel to newly renovated dinner using the screen that your watch the Sunday gaming room or me&u app, prepar
Slide 13: Where we are now: Building the foundations to deliver our vision
Where we are now: Building the foundations to deliver our vision Step change digital engagement Enhance and Expand our network Optimise the Group • Enable discovery in Dan Murphy’s • Continue to optimise our offer in the • Recently formed independently through personalised My Dan’s offers ~2,000 com
Slide 14: Where we are now: Seeding innovation
Where we are now: Seeding innovation Innovative customer offerings Driving trend creation and brand innovation Developing partnerships: Retail Media • Enhancing Hotels’ digital • Driving innovation to create the next • MixIn, our Retail media business is a experience through trends in the market new
Slide 15: Where we're going: Bringing our strategy to life
Where we’re going: Bringing our strategy to life Leading customer Efficient end-to-end Partnerships that grow One team living our Positive and sustainable offer business our industry purpose and values imprint • We have a rich • We continuously grow • We have expanded our • We have created a culture
Slide 16: Commitment to our imprint
Commitment to our imprint Responsibility People Planet and Community Advocating responsible choices Championing individuality, Reducing our impact on and supporting positive change human and personal rights the planet in our communities 16
Slide 17: Responsibility and Community
Responsibility and Community Our Goal 1. Demonstrate leadership in the responsible service of alcohol and gambling 2. Enable customers to make informed decisions about our products and services to encourage responsible What we’ve achieved consumption 3. Partner with experts to identify potential str
Slide 18: People
People Our Goal 1. Create a safe, inclusive workplace where our teams are trained and empowered 2. Respect and promote human rights and What we’ve achieved ethics in our operations and supply chain 3. Respect our customers’ privacy and 76% Voice of Team engagement score acknowledge the importance of
Slide 19: Planet
Planet Our Goal 1. Demonstrate our commitment to addressing climate change and reducing our carbon footprint 2. Adopt and maintain sustainable practices in our use of natural What we’ve achieved resources 113 sites with solar panels installed 3. Enhance the circularity of our products and our indust
Slide 20: Retail Segment Overview
Retail Segment Overview 26 endeavour 7S group 20
Slide 21: Our retail brands
Our retail brands Key retail brands One of Australia’s most trusted destinations for drinks discovery, with 258 stores and 28,000+ products online Offers some of the most convenient ways to buy drinks, with ̴1.4k stores supporting an expanding on-demand digital offer Specialty retail brands Australi
Slide 22: Dan Murphy's at a glance
Dan Murphy’s Cellar, Lane Cove, NSW Dan Murphy’s at a glance Our footprint Our customers Our online presence 258 4.0m 56% Stores Active membership Growth in online orders program users 7k 79 52% Total team members; 248 Sales originate online Wine and Spirit Education Customer VOC NPS score Trust (WS
Slide 23: Dan Murphy's helps you Drink Better
First on new trends and support local innovation Guarantee the lowest price and best value for customers while achieving a higher average selling price than market Enable drinks discovery through innovative store formats, knowledgeable team members and personalised, rich content online Dan Murphy’s
Slide 24: Dan Murphy's Strategic Growth Drivers
Dan Murphy’s Strategic Growth Drivers Discovery Memorable Experiences Personal Interactions Team & Community We drive for trend leadership We enable the most We create personalised We are a responsible business to help customers discover engaging end-to-end moments that are relevant enabling our tea
Slide 25: BWS at a glance
BWS at a glance Our footprint Our customers Our online presence 9,000+ 26 81% Team members Customer NPS Growth in online orders ~1,400 300,000 Stores throughout Australia Average monthly active app users 76% 76% Online Onlineorders orders delivered delivered viavia express, ~3,800 ~1m with remaining
Slide 26: Drinks Your Way.
Well known, trusted and loved brand in the local community that offers some of the most convenient ways to buy drinks Valued connections with local communities through hyper localised range and format Expansive footprint across Australia, underpinned by a large store network in convenient locations
Slide 27: BWS strategic growth drivers
BWS strategic growth drivers Team Local Convenience Enable our team to spark Lead in local trends through ultra Revolutionise convenience moments with customers local range and experience enabled and deliver a seamless by world class store formats omnichannel experience 27
Slide 28: Australian Leisure & Hospitality
Australian Leisure & Hospitality Our Hotels business The Rogue Squire, Wheelers Hill, VIC 28
Slide 29: Hotels at a glance
HOTELS at a glance Our footprint Our customers Our digital presence 344 8.4 227k Hotel network VOC Average monthly (including clubs) order & pay at 569k table users 11k Average monthly engaged 553k Team members social media users Average monthly 12,540 website visitors EGMs Note: All data is either
Slide 30: Market leading integrated offer
Market leading integrated offer FOOD BARS GAMING ACCOMODATION DIGITAL 300+ 900+ 300+ 110+ 119k Bistros Bars Rooms Properties Daily food & beverage transactions 250+ 11k 300+ & 290+ 2,450 193k Function rooms Average monthly TAB & Keno outlets Rooms Average monthly event ticket sales tables booked Bis
Slide 31: Our strategic growth drivers
Our strategic growth drivers We are community minded, with a deep commitment to our responsibilities. Our People Our Experience Our Platform Moments That Matter Local & Authentic Easy & Convenient Simplify & Fly Portfolio Management 31
Slide 32: Supporting capabilities
Supporting capabilities endeavourX Pinnacle Drinks 32
Slide 33: endeavourX at a glance: we manage the Group's digital platform
endeavourX at a glance: we manage the Group’s digital platform Websites & apps Membership programs eCommerce Group capabilities The front door to our brands Understanding and creating Providing easier ways to shop Providing digital capabilities to for all customers value for our most engaged as our
Slide 34: endeavourX at a glance
endeavourX at a glance Our assets 129m Total online web traffic ~1m Monthly active app users across ~4.4m Active retail loyalty members Group Our capabilities ~350 Team 7.5m Average number of personalised 35% Dan’s and BWS on-demand orders conversations initiated fulfilled via Jimmy per week (Q3 22)
Slide 35: Pinnacle operates end-to-end across Endeavour's value chain
Pinnacle operates end-to-end across Endeavour’s value chain Raw Materials Production Assets & Insights, NPD & Brand Distribution Owned strategic super Supplier Partnerships Building Channels premium vineyards Premium commercial winery Customer insights and category Endeavour core retail AU/NZ premiu
Slide 36: Pinnacle at a glance
Pinnacle at a glance Our customer reach Our growth Our premium customers and margin Top 4 +50% 116% Growth in Pinnacle sales Branded liquor supplier in Over-index with since F19 total Australian retail by premium customers sales (#1 in wine) vs. total Endeavour 69% 3x +35% Sales growth vs. Margin ac
Slide 37: H1 F23 Results
H1 F23 Results Our latest Financial results 37
Slide 38: H1 F23 Financial result highlights
H1 F23 Financial Cash and capital foundations result highlights $643m Operating cash inflow Financial results H1 F22: $932m Delivering for shareholders $6.5b $1.2b 20.3c Debt headroom Earnings per share Sales +2.6% YoY +14.2% 3 Yr¹ $205m $644m Capital expenditure (excl. Victorian gaming 14.3c Interi
Slide 39: Our Retail financial performance
Our Retail financial performance Market and sales are stabilising ● Cycling elevated H1 F22 sales (pandemic-related) ● On a 3-year basis, sales were up 14.0% (CAGR of 4.5%)1 H1 F23 H1 F22 CHANGE ● Customers returning to in-store shopping and socialising Sales ($m) 5,446 5,657 (3.7%) on-premise EBITD
Slide 40: Our Hotels financial performance
Our Hotels financial performance Robust recovery in H1, with a return to more stable trading following pandemic-related disruptions H1 F23 H1 F22 CHANGE ● Hotels thrived as customers embraced the Sales ($m) 1,056 680 55.3% opportunity to socialise EBITDA ($m) 389 245 58.8% ● On a 3-year basis, sales
Slide 41: Enabling the omnichannel experience across the Group
Enabling the omnichannel experience across the Group Customers are increasingly engaged in omnichannel experiences $485m -19.6% YoY Retail online sales +50.6% 3 Yr1 ● Over 35% of Retail sales are digitally influenced ● 43% of Hotels food sales are enabled by order and pay at table 8.9% -175 bps YoY
Slide 42: H1 F23 Highlights
H1 F23 Highlights 382 ‘Together, we craft brands people love’ New products launched 9 Best in Class trophies Sales remain robust supported by both our own brands and exclusive arrangements ~35% with independent suppliers Sales growth in Paragon Wine Estates portfolio Leading in trends and innovation
Slide 43: Cash and liquidity
Cash and liquidity Debt maturity profile ($ million)2 Committed drawn Strong operational performance and disciplined cost Committed undrawn management generated operating cash inflows of Uncommitted drawn3 $643m 775 Healthy balance sheet, including Leverage ratio¹ 3.3x, 150 consistent with investmen
Slide 44: Capital expenditure – Focus of H1 F23 investments
Capital expenditure – Focus of H1 F23 investments Retail 52.0% $205m1 Hotels 48.0% Capital expenditure of $205m excluding Victorian gaming entitlements Digital, data and ● Continued investment in growing our network of eCommerce stores, hotels and wine assets Property 9.5% redevelopments Stay in bus
Slide 45: Our capital allocation aligns to our strategic priorities
Our capital allocation aligns to our strategic priorities H1 Status and expectations H1 Capex Return time frame ● Consistent with previous year; efficiencies targeted through Stay in Business procurement and lifecycle management $47m (22.9%) Enabler ● Initiation phase for multi-year transition Techn
Slide 46: Balance sheet
Balance sheet1 $ million H1 F23 F22 H1 F22 1 JAN 2023 26 JUNE 2022 2 JAN 2022 Trade working capital 545 546 238 Lease assets 3,164 3,126 3,132 Property, plant and equipment 1,973 1,935 1,898 Intangible assets 4,236 3,894 3,852 Other liabilities (net) (783) (677) (811) Funds employed 9,135 8,824 8,30
Slide 47: Cash flow
Cash flow $ million H1 F23 H1 F22 (27 WEEKS) (27 WEEKS) CHANGE EBIT 644 556 88 Depreciation and amortisation expenses 283 267 16 Changes in trade working capital (33) 248 (281) Changes in assets and liabilities and other non-cash items 127 136 (9) Finance costs on borrowings paid (28) (29) 1 Payment
Slide 48: Group financial performance
Group $ million H1 F23 (27 WEEKS) H1 F22 (27 WEEKS) CHANGE financial Sales Retail 5,446 5,657 (3.7%) performance Hotels Total sales 1,056 6,502 680 6,337 55.3% 2.6% Profit for the period Retail EBIT 418 461 (9.3%) Hotels EBIT 256 121 111.6% Other (30) (26) 15.4% Total EBIT 644 556 15.8% Finance cost
Slide 49: Historical financial performance
Historical financial performance COVID-19 Pre COVID-19 COVID-19 unwind Retail H1 F19 H2 F19 H1 F20 H2 F20 H1 F21 H2 F21 H1 F22 H2 F22 H1 F23 Sales ($M) 4,564 3,889 4,777 4,509 5,690 4,488 5,657 4,429 5,446 EBIT 316 222 338 231 419 250 461 204 418 EBIT Margin (%) 6.9% 5.7% 7.1% 5.1% 7.4% 5.6% 8.1% 4.
Slide 50: Disclaimers
Disclaimers This presentation is dated 17 March 2023 and unless stated otherwise is current as at that date. This presentation contains summary and general information about Endeavour Group Limited and its controlled entities (together, the Group or Endeavour Group), and Endeavour Group’s activities
Slide 51: Key contacts
Key contacts Steve Donohue Chief Executive Officer Shane Gannon Chief Financial Officer Sean O’Sullivan Head of Investor Relations Mobile: (61) 412 139 711 Email: sean.osullivan@edg.com.au 51