Australian Vintage Ltd · ASX:AVG
Australian Vintage — Shareholder Meeting (November 2013)
42 slides from Australian Vintage's shareholder meeting presentation, Nov 20, 2013
Slide 1: Annual General Meeting 20 November 2013
For personal use only ANNUAL GENERAL MEETING 20 NOVEMBER 2013 1
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation is general advice, given in good faith and derived from sources believed to be accurate at this date but no warranty of accuracy or reliability is given and no responsibility arising in any other way including by reason of neglige
Slide 3: Annual General Meeting
For personal use only ANNUAL GENERAL MEETING 20 NOVEMER 2013 3
Slide 4: Today's Agenda
Today’s Agenda For personal use only Performance Summary Ian Ferrier Business Update Neil McGuigan Formal Proceedings Ian Ferrier 4
Slide 5: Performance Summary
For personal use only PERFORMANCE SUMMARY IAN FERRIER 5
Slide 6: Optimism after enduring a protracted downturn
Optimism after enduring a protracted downturn: For personal use only Australian Vintage has endured a protracted industry downturn impacted by: 1. High Australian dollar 2. Cyclical oversupply across whole of industry 3. Higher taxes in key export markets (UK) Company response – Position for growth
Slide 7: Your company
Your company For personal use only 1. One of Australia’s largest wine producers – Crushes 150,000 tonnes a year – 8% of total Australian crush – Sells 85 million litres of wine – Operates 3 wineries in the Hunter Valley, Sunrayasia and the Barossa – 2,900 planted hectares in 11 vineyards – Productio
Slide 8: 2013 Results summary
2013 Results summary: Australian Vintage Maintains Profit and Dividend and For personal use only Reduces Cost Base 1. Net Profit of $7.1 million 2. Dividend 2.6 cents per share fully franked 3. Annual Costs down $4.5 million by vineyard lease renegotiation 4. 2013 vintage at 153,000 tonnes (2012 tot
Slide 9: 2014 strategy
2014 strategy is to continue to respond to industry challenges and market opportunities with robust assets For personal use only and active management 1. Growing focus and investment in increasingly valuable brands – Increased volume of high quality 2013 vintage 2. Build on growing international rep
Slide 10: September capital raising gives stronger balance sheet flexibility
September capital raising gives company stronger balance sheet flexibility For personal use only • Successful raising of $41.8 million new capital with good institutional and retail support • Proceeds used to reduce debt • AVL’s banking facility extended to September 2015 with significantly better t
Slide 11: 2014 Outlook
2014 Outlook For personal use only • Industry – Global Industry conditions are improving as demand outpaces supply – Grape production and sales in Australia are trending to balance – Global demand continues to grow in emerging markets such as Asia – Weakening AUD against GBP and Euro are expected to
Slide 12: Outlook (continued)
Outlook (continued) For personal use only Forecast 2014 net Profit for Australian Vintage Limited • We remain optimistic about the business. • We continue to face short term challenges. A recent frost event is likely to cause yield loss in our vineyards but we expect the FY14 profit impact to be min
Slide 13: Business Review
For personal use only BUSINESS REVIEW NEIL MCGUIGAN 13
Slide 14: Vision for AVL
Vision for AVL For personal use only TO MAXIMISE RETURNS ON SHAREHOLDERS FUNDS How will this be done • Continue to put the “wine” back into the wine business • Make the wine the “hero” in every facet of our business branded private label exclusive label contract winemaking • Put personality
Slide 15: Global Wine Industry
Global Wine Industry For personal use only 1. We cautiously believe the industry globally is moving towards balance. • Oversupply is decreasing - Global output fell from 26,400 million litres in 2011 to 24,800 million litres in 2012. The 2012 vintage was the smallest since 1975. • Consumption is inc
Slide 16: World Industry Conditions (continued)
World Industry Conditions (continued) Global Wine Supply and Demand For personal use only Note: Provisional 2011 data, 2012 estimates; Area under vine covers all grapes * Consumption figures include c.333m 9L cases of wine used in the production of fortifieds and industrial applications Source: Inte
Slide 17: World Industry Conditions - Summary
World Industry Conditions - Summary For personal use only 1. The global wine industry is cyclical, partially due to the slow supply response. 2. The industry cycle is currently moving towards supply/demand balance. 3. Global area under vine continues to decline. 4. Global consumption growth is begin
Slide 18: Australian Wine Industry: 2013 Vintage
Australian Wine Industry 2013 Vintage For personal use only 1. The quality of the 2013 vintage was very good with some parcels of wine higher in quality than the exceptional 2012 vintage. 2. The Australian industry crush increased by more than 10% to 1.83 million tonnes. The 2012 crush was 1.66 mill
Slide 19: Australian Wine Industry (continued)
Australian Wine Industry (continued) 2013 Vintage For personal use only 6. Although the 2013 vintage is above expectations the long term outlook is that the supply and demand will continue to move towards balance. 7. The high AUD, which has negatively impacted profitability of wine companies, has re
Slide 20: Australian wine – Supply and Demand
Australian wine – Supply and Demand • Australian wine production and sales have been balanced for past 4 years For personal use only Export sales ‐ tonnes (one year delay) Domestic Sales ‐ tonnes (one year delay) Wine grape crush (tonnes) '000 Tonnes 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 2
Slide 21: Key Markets for Australian Wine
Key Markets for Australian Wine Asia Pacific is the fastest growing region • Asia Pacific (China, Malaysia, Japan, Hong Kong, Korea, etc.) growing at the fastest rate For personal use only • Western Europe in decline • Eastern Europe has recovered since GFC • Australasia (Australia, New Zealand) is
Slide 22: AVL FY Result Summary
AVL FY 13 Result Summary For personal use only • FY13 Result reflected low volume 2012 vintage of 120,000 tonnes – increased average cost per litre – acquired $6m of bulk wine to meet requirements • Exchange rates remained at historically high levels during the year • Despite these difficult trading
Slide 23: Strong Growth Across Branded Portfolio
Strong Growth Across Branded Portfolio… For personal use only Brand Sales In 10% Growth In FY13 Brand Sales In 26% Growth In FY13 Brand Sales In 18% Growth In FY13 6% UK 2% 2% 3% 1% 3% Australia 13% 5% 10% Australia Asia Australia Ireland Asia NZ N.America UK & EU 18% Other 63% 91% 83% N. America Ot
Slide 24: Core Brand Portfolio: McGuigan Wines
Core Brand Portfolio… For personal use only McGuigan Wines – The Wine is the Hero ‘Quality, consistency, value and innovation are the hallmark of the McGuigan brand. Our award-winning pedigree is second to none, and our premium winemaking credentials are without rival. Continued and sustained succes
Slide 25: NPD launch: The Philosophy
NPD launch The Philosophy For personal use only Overview: • Release of McGuigan Philosophy – RRP $150 • 2010 Cabernet Shiraz from the Clare Valley. • Inspire consumers through ‘Halo Product’ and inform them of the quality of the brand and recent successes in international wine competitions. • Gift b
Slide 26: Core Brand Portfolio: Further success
Core Brand Portfolio… For personal use only Further success includes… • Black Label Red is the #1 selling branded red wine by volume in the Australian market. International Winemaker of the Year 2012 – • McGuigan Wines is ranked as the #2 Australian brand International Wine & Spirits Competition and
Slide 27: Core Brand Portfolio: Tempus Two
Core Brand Portfolio… For personal use only Tempus Two – Celebrate in Style. ‘Tempus Two is fashion, and fashion is about balance and harmony. This is reflected in everything the we do. Our labels and bottles – whilst different and non-conventional, - are in balance and harmony. Our winemakers explo
Slide 28: Core Brand Portfolio: Nepenthe
Core Brand Portfolio… For personal use only Nepenthe – We are the Adelaide Hills. ‘Nepenthe is the Adelaide Hills. Whilst wineries have begun sourcing grapes from other regions we are solely committed to Australia’s premier cool climate wine region. Sauvignon Blanc is the iconic white of the region
Slide 29: Continued Global Success
Continued Global Success… Brand Award McGuigan Trophy - International Winemaker of the Year International Wine & Spirits Competition For personal use only Trophy - Australian Producer of the Year International Wine & Spirits Competition Trophy - White Winemaker of the Year International Wine Challen
Slide 30: Marketing Initiatives Driving Growth
Marketing Initiatives Driving Growth… For personal use only McGuigan Black Label Alfa Romeo Consumer Promotion. IWSC Consumer Advertising Campaign – Radio | Print | Outdoor. Premium Range Launches – McGuigan Expressions | McGuigan Founder’s Series | McGuigan The Philosophy. New McGuigan E-Co
Slide 31: Marketing Initiatives Driving Growth
Marketing Initiatives Driving Growth… For personal use only Positioned as our ‘health & wellbeing’ low alcohol brand. Brand Refresh & Positioning – Summer Hues to Summer Light. Summer Light ‘Health & Well Being’ Campaign. Summer Light Fernwood Fitness Sponsorship. Summer Light Luxury Retre
Slide 32: 2013 Hong Kong International Wine & Spirits Competition
2013 Hong Kong International Wine & Spirits Competition… For personal use only McGuigan Wines won the Trophy for Best Shiraz | Syrah for the 2010 Langhorne Creek Hand Made Shiraz. Nepenthe received the Trophy for Best Red Wine in Hong Kong below HK$200 (AUD$<27) for the 2012 Nepenthe Altitude Pi
Slide 33: 2013 International Wine & Spirits Competition
2013 International Wine & Spirits Competition… For personal use only Nominated for Australian Producer of the Year – the fifth year in a row. International Semillon Trophy ‘world’s best Semillon’ – McGuigan Bin 9000 Semillon 2007. 1 Trophy, 6 Gold (5 Gold Outstanding), 26 Silver (8 Silver Outs
Slide 34: New Product Development: Summer Light
New Product Development…Summer Light. For personal use only ‘They're low-calorie , suddenly they're everywhere. But... are there ANY low alcohol wines you shouldn't pour down the sink?’ Miranda Summer Light Sauvignon Blanc, 5.5 per cent, £4.99, Morrisons ‘The aroma is certainly better than much of t
Slide 35: Responsibility to Shareholders
Responsibility to Shareholders For personal use only 1. AVL management is fully aware that we work for you, the shareholders. 2. AVL’s management is continually reviewing costs, new business opportunities and innovation to increase profitability and to maximise a return on shareholders funds. 35
Slide 36: Summary
Summary For personal use only • AVL has a very strong and experienced board that provide very clear strategies to management. • We are totally convinced that our strategies are correct, but we must remain patient. • AVL continues to review its cost base to ensure it is appropriate for the size of it
Slide 37: Formal Proceedings
For personal use only FORMAL PROCEEDINGS IAN FERRIER 37
Slide 38: Accounts
Accounts For personal use only “To consider and receive the Financial Report, the Directors’ Report and the Auditor’s Report of the Company for the year ended 30 June 2013.” 38
Slide 39: Resolution: Re-election of Director
Resolution 1 For personal use only • To consider and if thought fit, pass as an ordinary resolution: “That Perry R Gunner is re-elected as a Director of the Company.” 39
Slide 40: Resolution: Remuneration Report
Resolution 2 For personal use only • To consider and if thought fit, pass as an ordinary resolution: “That the Remuneration Report of the Company for the year ended 30 June 2013 be adopted.” 40
Slide 41: Resolution: Performance Rights Grant
Resolution 3 For personal use only • To consider and if thought fit, pass an ordinary resolution: “That approval is given as required by the Corporations Act and ASX Listing Rules for: The grant of 257,003 performance rights under the AVG Performance Rights and Option Plan (“Plan”) (approved by sh
Slide 42: For personal use only
For personal use only 42
Australian Vintage — Shareholder Meeting (November 2013) on 6ix