Foley Wines Ltd. · NZX:FWL
Foley Wines — Investor Presentation (March 2019)
28 slides from Foley Wines's investor presentation, March 2019
Slide 1: NZX Retail Investor Evening March 2019
NZX Retail Investor Evening M A R C H 2 0 1 9
Slide 2: Agenda
FOLEY WINES | NZX RETAIL INVESTOR EVENING Agenda About Foley Wines Strategic relationships Topline numbers Strategic priorities Outlook
Slide 3: Made by land & hand
FOLEY WINES | NZX RETAIL INVESTOR EVENING made by land A collection of iconic wineries and brands from New Zealand’s most & hand acclaimed wine regions Linked by a common unrelenting purpose; to make great wine that people love to drink around the world – made by land & hand.
Slide 4: Our ambition
FOLEY WINES | NZX RETAIL INVESTOR EVENING Our ambition To be New Zealand’s most revered wine group Through the ownership of iconic wineries in New Zealand’s most acclaimed regions, inspiring the most discerning retailers and restaurants around the world.
Slide 5: The journey so far
FOLEY WINES | NZX RETAIL INVESTOR EVENING The journey A strong track record of rejuvenating so far and growing iconic New Zealand wineries and brands 2009 Vavasour and Dashwood acquired 2011 Te Kairanga acquired 2012 Grove Mill acquired 2014 Lighthouse Gin acquired 2014 Martinborough Vineyard acquir
Slide 6: Our wineries & distillery
FOLEY WINES | NZX RETAIL INVESTOR EVENING Our wineries & distillery Martinborough Grove Mill Vineyard Wairau Valley, Marlborough Martinborough Te Kairanga Vavasour Martinborough Awatere Valley, Marlborough Mt Difficulty Lighthouse Gin Central Otago Martinborough
Slide 7: Our business model
FOLEY WINES | NZX RETAIL INVESTOR EVENING Our business Centralised services delivering cost model advantages, market access and a competitive position internationally. Enabling the wineries to focus on creating amazing wine.
Slide 8: Five artisan wineries and one craft distillery managed from one point
FOLEY WINES | NZX RETAIL INVESTOR EVENING Five exceptional artisan wineries and one craft distillery from three acclaimed regions, managed from one point.
Slide 9: This model delivers economies of scope
FOLEY WINES | NZX RETAIL INVESTOR EVENING This model Economies of scope delivers (plus economies of scale) due to our focus on related diversification.
Slide 10: Strategic relationships
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic relationships
Slide 11: Foley Wines USA
FOLEY WINES | NZX RETAIL INVESTOR EVENING Foley Wines USA A far-reaching network with a strategic focus on our New Zealand wineries All New Zealand winery brands are now represented by Foley Wines USA, owned by Bill Foley and his family. Access to over 150 sales personnel employed by the Foley Group
Slide 12: Lion New Zealand Partnership
FOLEY WINES | NZX RETAIL INVESTOR EVENING Lion New Zealand Partnership New Zealand’s largest alcohol beverage company Over 100 sales representatives selling our portfolio into New Zealand’s on premise, grocery and traditional channels. 53 directly managed on premise venues. 26 owned retail stores. I
Slide 13: Topline numbers
FOLEY WINES | NZX RETAIL INVESTOR EVENING Topline numbers
Slide 14: Year ended June 18 results
FOLEY WINES | NZX RETAIL INVESTOR EVENING Year ended June 18 results Bottled sales revenue $38m +25.27% Operating earnings $3.16m* +7% Export cases 327,000 dozen +10% Profit for period after tax $2.18m* +52% Operating cash flow $7.2m +104.8% Dividend 3 cents per share * Adjusted for one-off costs as
Slide 15: Continuous momentum
FOLEY WINES | NZX RETAIL INVESTOR EVENING Continuous momentum Year ended June 18 Six months to December 18 Bottled sales revenue $38m +25.27% $21.1m +13.8% Operating earnings $3.16m* +7% $2.387m +145.8% Export cases 327,000 dozen +10% 210,000 dozen +46.8% Profit for period after tax $2.18m* +52% $1.
Slide 16: Export case sales growth
FOLEY WINES | NZX RETAIL INVESTOR EVENING Export case sales growth Australia USA/Canada UK/Europe Rest of world Year ended June 18 Year ended June 18 Year ended June 18 Year ended June 18 113,000 cases 122,000 cases 73,000 cases 19,000 cases +66 % -17% +14% +5%
Slide 17: Export case sales growth
FOLEY WINES | NZX RETAIL INVESTOR EVENING Export case sales growth Australia USA/Canada UK/Europe Rest of world Year ended June 18 Year ended June 18 Year ended June 18 Year ended June 18 113,000 cases 122,000 cases 73,000 cases 19,000 cases +66 % -17% +14% +5% Six months to December 18 Six months t
Slide 18: New Zealand: long term brand and margin building
FOLEY WINES | NZX RETAIL INVESTOR EVENING New Zealand Long term brand and margin building New pricing and promotional strategy being implemented in New Zealand with Lion. Volumes reflect this disruption and are in line with expectations. Margin per case from New Zealand sales is up by 100%. Year end
Slide 19: Our strategic priorities
FOLEY WINES | NZX RETAIL INVESTOR EVENING Our strategic priorities
Slide 20: Strategic priority 1: premiumisation strategy
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic Continuing to realise our priority 1 premiumisation strategy Building brands people love underpinned by excellent wine quality. We have the wine quality to sell more at higher price points. Investing in developing premium brands. Lifting prices in
Slide 21: Strategic priority 2: leveraging the power of our portfolio
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic Leveraging the power of our priority 2 portfolio A ‘one stop shop’ portfolio of brands across price points and regions delivering real value to our customers and distributors. Our powerful portfolio gives us the ability to choose to work with partn
Slide 22: Strategic priority 3: nurturing long term relationships
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic Nurturing strong, long term priority 3 relationships in key markets We are a collaborative and agile partner delivering real value for our customers and distributors.
Slide 23: Strategic priority 4: cementing our new Lion partnership
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic Cementing our new Lion partnership priority 4 Implementing a new sales support structure in New Zealand giving us access to premium distribution across all channels.
Slide 24: Strategic priority 5: process improvement and cost savings
FOLEY WINES | NZX RETAIL INVESTOR EVENING Strategic Focus on process improvement and priority 5 delivering cost savings Scaling up: increasing volume and Mt Difficulty acquisition.
Slide 25: These strategic priorities will enable us to
FOLEY WINES | NZX RETAIL INVESTOR EVENING These strategic • Sell more Sell more of our premium brands priorities will • • Realise more value for our entry level brands enable us to: • Reduce costs Increased returns for shareholders.
Slide 26: Outlook
FOLEY WINES | NZX RETAIL INVESTOR EVENING Outlook Positive outlook on vintage, volumes and earnings. Focused on doubling underlying earnings for full year (taking into account Mt Difficulty costs and integration). Our due diligence estimated a further $5-6m of EBITDA in the first full year.
Slide 27: Grove Mill Sauvignon Blanc double trophy winner
G R OV E M I L L S AU V I G N O N B L A N C 2 0 1 8 Double Trophy Winner CHAMPION CHAMPION SAUVIGNON BLANC SAUVIGNON BLANC Roy a l Ea ster Show N ew Zea l a nd I nterna tiona l W ine A w a rd s 2 0 1 9 W ine Show 2 0 1 8
Slide 28: Mark Turnbull | CEO
FOLEY WINES | NZX RETAIL INVESTOR EVENING MARK TURNBULL | CEO Mark@f oleywines.co.nz