Slide 1: Full Year Results
For personal use only TREASURY WINE ESTATES FULL YEAR RESULTS 19 August
Slide 2: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 3: Result headlines
Result headlines1,2 • Statutory net profit after tax $77.6 million; up $178.5m on the prior year For personal use only • Net sales revenue (NSR) up 8.4% on a reported currency basis and by 3.8%3 on a constant currency basis • Of the 15 priority brands4, 11 brands delivered NSR growth versus 6 brands
Slide 4: F15 re-set year: achievements
F15 re-set year: achievements 1H15 achievements 2H15 achievements For personal use only • Seamlessly transitioned Penfolds release date to October • Delivered $40m+ reduction in overhead savings • Significant step-up in consumer marketing • Identified a further $15m of overhead savings to be
Slide 5: Priority Brand highlights in F15 – ANZ
Priority Brand highlights in F15 – ANZ For personal use only Penfolds Yellowglen Penfolds Collection Spring Racing Vintec Promotion October Release Carnival Innovation Launches Wolf Blass ICC World Penfolds Magill Estate Matua Taste & Pepperjack Cup Cricket Promotion Opening Certified
Slide 6: Priority Brand highlights in F15 – Americas
Priority Brand highlights in F15 – Americas For personal use only Beringer Local Beringer Taste Strips 19 Crimes distribution Knowledge Campaign Innovation acceleration and line extension Innovation Launches Matua distribution Lindemans HGTV Beringer Waymaker, acceleration Campaign Stags’ Leap The I
Slide 7: Priority Brand highlights in F15 – Asia and EMEA
Priority Brand highlights in F15 – Asia and EMEA For personal use only Penfolds Penfolds Wolf Blass Vintec Promotion – Asia and Collection UK Sports Campaign EMEA October Release – Asia and EMEA Wolf Blass Singapore Rawson’s Retreat Asia Innovation Launches Sports Hub Campaign Distribution Gains Nor
Slide 8: Tony Reeves, Chief Financial Officer
For personal use only Tony Reeves Chief Financial Officer
Slide 9: Profit & Loss
Profit & Loss For personal use only Reported Currency Constant Currency $Am (unless otherwise stated) F15 F14 Change F14 Change Volume (m 9L cases) 30.1 30.0 0.4 % 30.0 0.4 % Net sales revenue 1,848.3 1,705.6 8.4 % 1,781.4 3.8 % Other Revenue 113.8 109.7 3.7 % 113.8 - Cost of goods sold (1,320.2) (1
Slide 10: Impact of foreign exchange movements & hedge losses
Impact of foreign exchange movements & hedge losses Benefit from movements in foreign exchange rates in F15 $19.3m below prior year For personal use only • Overall foreign exchange rate benefit in F15 was $9.2m (versus $28.5m in F14) • TWE has a diversified portfolio of currency exposures where prod
Slide 11: Foreign currency risk management
Foreign currency risk management Foreign exchange risk management strategy: For personal use only • Partial hedge of exposures; focused on Commercial and lower Masstige where limited ability exists for TWE to increase price following adverse movements in foreign exchange rates • Participating approa
Slide 12: US distributor inventory realignment
US distributor inventory realignment Two year program to address excess distributor inventory successfully completed For personal use only In total, 3.5m cases of distributor inventory was actioned as part of the realignment program by the following: 1. Destruction of old and obsolete wine Complet
Slide 13: Cash flow and net debt
Cash flow and net debt A$m (unless otherwise stated) F15 F14 Significantly improved cash conversion at 102.5% For personal use only EBITDAS 309.6 270.3 • Net debt increased $4.5m to $213.9m of which $57.2m Change in working capital 12.0 (73.2) Other items (4.4) 0.3 related to lower period-end exchan
Slide 14: Capital expenditure
Capital expenditure For personal use only Continued investment in premiumisation A$m F15 F14 • Capex of $90.8m in F15 was $9.2m favourable to IT spend 12.0 16.2 guidance and reflected: Vineyard redevelopments 21.8 6.1 – Premiumisation activities, including investment Oak purchases 18.2 16.6 in viney
Slide 15: Balance Sheet
Balance Sheet For personal use only A$m F15 F14 Strong and flexible balance sheet maintained Cash & cash equivalents 122.1 52.0 • Net assets up $201.9m in F15. Adjusted for foreign Current receivables 504.9 407.9 exchange rates, net assets decreased $36.8m Non-current receivables 1.7 7.0 • Improved
Slide 16: Capital structure and debt profile
Capital structure and debt profile For personal use only Group debt maturity profile Robust capital structure and debt profile • TWE retained committed undrawn syndicated debt 300 Drawn Undrawn facilities of $625.8m in F15 up $60.4m relative to the 250 US$250m SFA prior year, entirely driven by move
Slide 17: Inventory analysis
Inventory analysis Inventory at book value split by segment – F15 and F14 Inventory composition maintained For personal use only • Total inventory up $5.7m, of which +$85.4m related to Total Luxury movements in foreign currency at cost $557m • Non-current inventory increased $8.6m driven by: – $27.8
Slide 18: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 19: ANZ – Solid result; momentum continuing
ANZ – Solid result; momentum continuing A$m F15 F14 % F14 % • Lower volume reflected focus on sustainable and profitable For personal use only Reported currency Constant currency Reported volume currencydepletions exceeded shipments. TWE- and ensuring Volume (m 9Le) 7.6 7.8 (2.2)% 7.8 (2.2)% branded
Slide 20: EMEA – Currency challenged; signs of growth in 2H15
EMEA – Currency challenged; signs of growth in 2H15 A$m F15 F14 % F14 % • Volume was driven by: For personal use only Reported currency Constant currency – Reported Exit fromcurrency unsustainable volume in the UK Volume (m 9Le) 6.5 6.6 (2.2)% 6.6 (2.2)% – Volume growth in Western Europe, Middle Eas
Slide 21: Americas – Investment driving priority brand growth
Americas – Investment driving priority brand growth A$m F15 F14 % F14 % • Robust depletions growth of Luxury (+16%), Masstige (+20%) For personal use only Reported currency Constant currency and priority ReportedCommercial currency (+1%) brands offset by decline in non- Shipments (m 9Le) 14.5 14.3 1
Slide 22: Asia – Execution and brand health driving profit growth
Asia – Execution and brand health driving profit growth For personal use only A$m F15 F14 % F14 % • Volume growth in Greater China (up 36%) and Southeast Reported currency Constant currency Asia Reported (up 13%)currency driven by positive customer and consumer Volume (m 9Le) 1.6 1.3 23.0% 1.3 23.0%
Slide 23: New Brand Campaigns in F16
New Brand Campaigns in F16 For personal use only Chateau St Jean 19 Crimes Stags’ Leap The Sonoma You Share To The Banished Antler New Wolf Blass Campaign New Beringer Campaign Commenced Aug 2015 Commencing October 2015 New Yellowglen Campaign featuring Samantha Wills
Slide 24: Brand Activation in 1Q16
Brand Activation in 1Q16 For personal use only 23
Slide 25: Innovation to be delivered in 1Q16
Innovation to be delivered in 1Q16 For personal use only 19 Crimes Cabernet Etude Central Otago Rosemount Estate New Packaging for Blass by Wolf Blass Sledgehammer Sauvignon Pinot Noir Food Wine Series Beringer Founders Pinot Noir Estate
Slide 26: Innovation to be delivered in 2Q16
Innovation to be delivered in 2Q16 For personal use only Squealing Pig Lindemans Penfolds The Max Georg Jensen Central Otago Pinot Gentleman’s Schubert and Collaboration with Noir Rosé Collection Batches Penfolds Max’s Heemskerk
Slide 27: Outlook
Outlook For personal use only • Transition from an order-taking, agricultural company to a brand-led, marketing organisation continues • TWE pursuing premiumisation strategy by consistently reducing holdings of Commercial inventory and continuing to hold Luxury and Masstige wine • Continue to manage
Slide 28: Questions
For personal use only QUESTIONS
Slide 29: 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 30: Supplementary Information
Supplementary For personal use only Information
Slide 31: Definitions
Definitions For personal use only Term Definition Throughout this presentation, constant currency assumes current and prior period earnings of Constant currency foreign operations are translated and cross border transactions are transacted at current year exchange rates NSR Net sales revenue EBITDAS