Artisanal Spirits Company PLC · LSE:ART
Artisanal Spirits — The Artisanal Spirits Company — FY2022 Earnings Presentation
35 slides from Artisanal Spirits's earnings presentation, March 2023
Slide 1: The Artisanal Spirits Company Plc FY22 Results Presentation
THE ARTISANAL SPIRITS COMPANY PLC FY22 Results Presentation – March 2023
Slide 2: Important Notice
IMPORTANT NOTICE For the purpose of this disclaimer, the “Presentation” shall mean and include these slides, all comments made by the presenter(s) of the slides and any question and answer session or discussion related to it. This Presentation has not been approved by an authorised person in accorda
Slide 3: ASC: Curators of the World's Favourite Single Cask and Limited-Edition Whisky
ASC: CURATORS OF THE WORLD’S FAVOURITE SINGLE CASK AND LIMITED-EDITION WHISKY • ASC is building a portfolio of limited-edition spirits brands for a global movement of discerning consumers, operating in a significant and growing addressable market. • Owner of SMWS, established in 1983, with a growing
Slide 4: The Scotch Malt Whisky Society (SMWS)
THE SCOTCH MALT WHISKY SOCIETY (“SMWS”) Global Direct to Premium E-Commerce Limited Whisky Membership consumer edition c65% revenue Over 90% of ASP of £99 Over 80% of Typically only 100% of stock Over 37,400 from across c30 revenue is D2C (exc. VAT) sales made 250 bottles required to FY28 paying cou
Slide 5: A Clear Framework for Profitable Growth
A CLEAR FRAMEWORK FOR PROFITABLE GROWTH We will captivate a global community of whisky adventurers by revealing the magic of our Purpose unique & outstanding whisky. We create, curate and sell outstanding, single cask & limited-edition whisky and artisanal Proposition spirits to premium drinks lover
Slide 6: Strong & Growing Key Metrics
STRONG & GROWING KEY METRICS GROWTH MEMBERS STOCK Global Revenue Members Casks +19.5% vs 2021 +12% vs Dec-21 +8% vs Dec-21 2022 £21.8m Dec 22 37,400 Dec 22 16,500 2021 £18.2m Dec 21 33,400 Dec-21 15,300 2020 £15.0m Dec-20 28,300 Dec-20 14,000 Gross Profit Annual Membership Retention Notional Retail
Slide 7: Growing Global Revenue
GROWING GLOBAL REVENUE ASC Group Revenue £m 2020 2021 2022 22 vs 21 UK E-Commerce 3.2 3.5 3.7 5% HEADLINES UK Venues & Events 1.5 2.3 3.7 59% Continued strong revenue growth UK Total 4.7 5.8 7.4 27% in China during a difficult local USA 2.7 4.1 4.4 6% Covid lockdown policy in year China 3 3.9 5.0 28
Slide 8: Strong Financials Reinvesting for Further Growth
STRONG FINANCIALS REINVESTING FOR FURTHER GROWTH ASC GROUP P&L HEADLINES £m 2020 2021 2022 22 vs 21 Revenue up c20% driven by Total Revenue 15.0 18.2 21.8 19% volume and China growth Cost of Sales (6.2) (7.0) (7.9) 13% Gross Profit 8.8 11.2 13.8 23% Gross margin growth in line with expectations – Gr
Slide 9: Loyal, Valuable and Growing Global Membership
LOYAL, VALUABLE AND GROWING GLOBAL MEMBERSHIP Last Twelve Months (LTM) to December 2022 Member Lifetime Value Revenue* Year End Average Revenue/ Contribution1/ Retention Expected LTV3 (Avg. £m Members Members Avg. Member Avg. Member % Years2 Member) UK 6,782 18,029 17,382 390 215 80% 5.1 1,095 Unite
Slide 10: Strong and Well-Capitalised, Asset-Backed Balance Sheet
STRONG AND WELL-CAPITALISED, ASSET-BACKED BALANCE SHEET ASC Group Balance Sheet ASC Cash Flow Statement Dec-22 vs £m FY20 FY21 FY22 HEADLINES £m Dec-20 Dec-21 Dec-22 Adjusted EBITDA 0.6 (0.6) 0.4 Fully funded to deliver growth ambition Dec-21 Change in Net WC (0.4) (1.4) (2.1) through FY24 Cash 2.2
Slide 11: ASC: A Unique and Exciting Opportunity
ASC: A UNIQUE AND EXCITING OPPORTUNITY o Loyal, valuable and growing global membership Pioneering o Constant stream of unique, award-winning products model o Relentless focus on innovation & delivering outstanding experiences o Direct to consumer with proven data-rich e-commerce platform & digital c
Slide 12: Pioneering Model
01 PIONEERING MODEL Artisanal Spirits Company – FY22 Results Presentation
Slide 13: SMWS: A Pioneering Model Creating Substantial Value Throughout the Chain
SMWS: A PIONEERING MODEL CREATING SUBSTANTIAL VALUE THROUGHOUT THE CHAIN Current State Future State >£6 per bottle cost of liquid Spirit Acquisition Using new make with cost of c£2 per bottle Vertical Integration c20-25% ex-sherry cask influence Active Maturation c35% ex-sherry cask influence PRODUC
Slide 14: A Pioneering Model with Strong Comparators
A PIONEERING MODEL WITH STRONG COMPARATORS LOWER HIGHER 4 (60% Net of Duty) 5 (63%) 1 (40%) Gross 2 (42%) 3 (47%) Margin 6 (69%) Source: 1. Naked Wines FY22 Annual Report (40%); 2 Diageo FY22 Annual Report (61% Net of Duty = 42% Gross of Duty); 3. Brown Forman FY22 10-K (61% Net of Duty = 47% Gross
Slide 15: Unique, Award-Winning Products
UNIQUE, AWARD-WINNING PRODUCTS Limited Edition Outstanding Quality Each cask yields average of Award Winning over 270 awards in less than 3 years 250 bottles of cask strength • IWSC Gold Outstanding, whisky • ISC Double Gold, • San Francisco World Spirit Competition Double Gold, • ICONS of Whisky -
Slide 16: Focus on Innovation & Outstanding Experiences
FOCUS ON INNOVATION & OUTSTANDING EXPERIENCES Being innovative is in our DNA. We bring passion for creativity and innovation to everything we do. We create and innovate to develop and grow as people and together grow the business. 91% of those 87% of members who have used rate the quality of our mem
Slide 17: D2C with Data-Rich E-Commerce Platform & Digital Content
D2C WITH DATA-RICH E-COMMERCE PLATFORM & DIGITAL CONTENT Unfiltered is SMWS’s multi award-winning magazine, available exclusively to members and a core part of our wider content distribution globally across social and owned channels – in multiple formats including live and catch-up broadcast 74% >80
Slide 18: Long Term Global Growth Opportunity
LONG TERM GLOBAL GROWTH OPPORTUNITY Artisanal Spirits Company – FY22 Results Presentation
Slide 19: Positioned for Increased Premiumisation & E-Commerce Growth
POSITIONED FOR INCREASED PREMIUMISATION & E-COMMERCE GROWTH Significant growth driven by increasing spending power 2021 GLOBAL SCOTCH WHISKY MARKET SIZE £/BOTTLE MARKET SIZE CAGR 2020-21 Consumers are driving Ultra-Premium & Above Spirits SEGMENT (70CL) ($ Billion) (2011-21) % Change premiumisation
Slide 20: Significant and Growing Addressable Market
SIGNIFICANT AND GROWING ADDRESSABLE MARKET Global Addressable Market Analysis Addressable Market ASC The total global Scotch Whisky addressable 2011-21 2020-21 Whisky Sales 2021 % market was $5.8b1 in 2021 up by 205%2 vs 2011, 2021 ($m) Growth Growth 2021 ($m) Share and grew by 26% in 2021 alone. Un
Slide 21: Robust Business Primed to Deliver
ROBUST BUSINESS PRIMED TO DELIVER Artisanal Spirits Company – FY22 Results Presentation
Slide 22: Strong Financials with High and Growing Margin
STRONG FINANCIALS WITH HIGH AND GROWING MARGIN Appreciation during maturation and direct to consumer route to market On track to deliver c35% of whisky helps deliver over £60 gross profit with an ex-sherry cask influence by per bottle FY24 (vs c15% in FY18) achieving c10% price uplift per bottle giv
Slide 23: Strong Financials with High and Growing Margin
STRONG FINANCIALS WITH HIGH AND GROWING MARGIN Short Term Medium Term Longer Term Masterton Bond supply chain facility Ex-sherry cask programme on track to Significant investment in younger and commenced operations in November deliver around 1% margin uplift (through new make whisky gives potential
Slide 24: Strong Financials: Low Debt Level Relative to Stock
STRONG FINANCIALS: LOW DEBT LEVEL RELATIVE TO STOCK Retail Value (Casks As Bottled Stock) £493m Inventory secured debt is an established Bank Liquidation Value (All Stock) £35m funding mechanism throughout the sector £28m Net Book Value (All Stock) Inventory Metrics and, as highlighted at IPO, forms
Slide 25: Experienced Board and Management Leading a Passionate and Engaged Team
EXPERIENCED BOARD AND MANAGEMENT LEADING A PASSIONATE AND ENGAGED TEAM EXPERIENCED BOARD & MANAGEMENT We have an experienced Board and management team, with a proven track record of delivery. PASSIONATE AND ENGAGED TEAM We were proud to receive an overall Employee Engagement Index score of 81 from o
Slide 26: Current Trading & Outlook
CURRENT TRADING & OUTLOOK Artisanal Spirits Company – FY22 Results Presentation
Slide 27: On Track to Meet 2024 Revenue Target and Deliver on Clear Path to Profitability
ON TRACK TO MEET 2024 REVENUE TARGET AND DELIVER ON OUR CLEAR PATH TO PROFITABILITY Current trading/Post period insights Continued Progress Towards Ambition of Doubling Sales by 2024 • Revenue in Q1-23 broadly flat year on year vs the exceptional growth £35m experienced in Q1-22. Growth phasing in l
Slide 28: Appendices
APPENDICES Artisanal Spirits Company – FY22 Results Presentation
Slide 29: Appendices
APPENDICES 01 02 03 04 05 Glossary KPIs Awards The Board Market Data Artisanal Spirits Company – FY22 Results Presentation
Slide 30: Glossary
01 | GLOSSARY A&P Advertising & Promotional Costs MPOS Mobile point of sale ASC Artisanal Spirits Company Notional retail Calculated as total litres of spirit in casks, converted to bottle value equivalent (based on 70cl) multiplied by average net CAGR Compound Annual Growth Rate revenue per bottle
Slide 31: Loyal, Valuable and Growing Global Membership (FY21 LTV)
02 | LOYAL, VALUABLE AND GROWING GLOBAL MEMBERSHIP (FY21 LTV) FY21 Lifetime Value Revenue Year End Average Revenue/ Contribution/ Expected LTV (Avg. £m Members Members Avg. Member Avg. Member Years Members) UK 5.8 16,400 14,000 415 190 6.7 1,280 United States 4.1 5,200 4,800 852 445 2.5 1,123 China
Slide 32: Awards
03 | AWARDS RECORD NUMBER OF AWARDS across at this year’s Spirits Business’ Luxury Masters, including a top prize and three gold medals for the Group’s new J.G. Thomson range SMWS’s Scotch Malt Whisky and other spirits have won almost 300 awards from seven of the leading bodies in less than three ye
Slide 33: The Board
04 | THE BOARD An experienced team with a proven track record Mark Hunter Andrew Dane Billy McCarter Paul Skipworth Non-Executive Chair Chief Executive Interim Finance Director NED & Deputy Chair Artisanal Spirits Company – FY22 Results Presentation Page 33
Slide 34: The Board
04 | THE BOARD An experienced team with a proven track record Lesley Jackson Helen Page Gavin Hewitt CMG Mark Bedingham NED & Audit NED & Remuneration NED NED Committee Chair Committee Chair CEO of Scotch Whisky Vice Chair of ASPL (NYSE Listed); Former CFO for Stock Spirits PLC Former Chief Brand Of
Slide 35: Market Data: SMWS Global Membership
05 | MARKET DATA: SMWS GLOBAL MEMBERSHIP Artisanal Spirits Company – FY22 Results Presentation Page 35
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