Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — H1 2017 Earnings Presentation
31 slides from Treasury Wine Estates's earnings presentation, Feb 14, 2017
Slide 1: Interim 2017 Results
For personal use only TREASURY WINE ESTATES Interim 2017 Results 14 February 2017
Slide 2: Michael Clarke, Chief Executive Officer
Michael Clarke For personal use only Chief Executive Officer 2
Slide 3: Result headlines
Result headlines1,2,3,4 • For personal use only Reported net profit after tax $136.2m; more than double prior year • Reported Earnings Per Share (EPS) 18.5 cents per share; more than double prior year • Reported EBITS5 $226.8m, up 59%; higher than F15 reported EBITS • All regions delivered double di
Slide 4: Brand and marketing highlights – Chateau St Jean
Brand and marketing highlights in 1H17 – Chateau St Jean For personal use only Investment in standout packaging and appetite appeal, “French” inspired design cues 4 4
Slide 5: Brand and marketing highlights – Beringer
Brand and marketing highlights in 1H17 – Beringer For personal use only Introducing “Main & Vine by Beringer” Commenced de-coupling of the Commercial tier and elevating the Luxury credentials of the Masterbrand 5 5
Slide 6: Brand and marketing highlights – Beaulieu Vineyard
Brand and marketing highlights in 1H17 – Beaulieu Vineyard For personal use only Separation and de-coupling the Commercial tier and elevating the Luxury credentials of the Masterbrand 6 6
Slide 7: Brand and marketing highlights – Beaulieu Vineyard
Brand and marketing highlights in 1H17 – Beaulieu Vineyard New advertising campaigns taking ownership of the brand’s enduring values For personal use only Honour Matters, Now more than ever 7 7
Slide 8: Brand and marketing highlights – Sterling Vineyards
Brand and marketing highlights in 1H17 – Sterling Vineyards For personal use only Refreshed packaging bringing the Sterling Vineyards brand name and proposition to life 8 8
Slide 9: Brand and marketing highlights – Sterling Vineyards
Brand and marketing highlights in 1H17 – Sterling Vineyards For personal use only “Always Polished, Never Dull” Positioning the brand as an aspirational choice for the millennial consumer 9 9
Slide 10: Brand and marketing highlights – Crimes
Brand and marketing highlights in 1H17 – 19 Crimes For personal use only Red Blend Cabernet Sauvignon The Banished Dark Red The Warden Red Blend More to Come Accelerating brand growth with bold product extensions with exciting innovation to come 10 10
Slide 11: Brand and marketing highlights – The Stag by St. Huberts
Brand and marketing highlights in 1H17 – The Stag by St. Huberts For personal use only Victorian Chardonnay & Shiraz North Coast, CA Cabernet Argentinian Malbec Globally sourcing The Stag by St. Huberts portfolio from Australia, North Coast CA and Argentina 11 11
Slide 12: Michael Clarke, Chief Executive Officer
Michael Clarke For personal use only Chief Executive Officer 12
Slide 13: Gunther Burghardt, Chief Financial Officer
Gunther Burghardt For personal use only Chief Financial Officer 13
Slide 14: Profit & Loss
Profit & Loss1 EBITS growth and regional contribution Historical EBITS and EBITS margin2 For personal use only $226.8m $134.1m Accelerating momentum across all regions delivering strong interim result • NPAT before material items and SGARA up $61.3m to $148.6m (+70%) principally driven by higher EBI
Slide 15: Balance Sheet
Balance Sheet1 Strong balance sheet maintained Committed debt facility maturity profile For personal use only A$m 1H17 F16 1H16 A$m Cash & cash equivalents 339.9 256.1 1,101.2 Receivables 622.3 611.4 593.8 Current inventories 927.3 895.7 710.9 Non-current inventories 645.2 678.4 461.0 Property, plan
Slide 16: Cash flow and net debt
Cash flow and net debt1 Excellent cash conversion maintained Continued investment in quality and an efficient asset base For personal use only A$m 1H17 1H16 A$m (unless otherwise stated) 1H17 1H16 IT Spend 2.9 9.2 EBITDAS 283.9 190.6 Oak Purchases 15.7 7.6 Change in working capital 12.8 42.5 Vineyar
Slide 17: Inventory analysis
Inventory analysis Inventory at book value split by segment – 1H17 & 1H161 For personal use only Inventory continues to premiumise • Total inventory increased $401m to $1,573m reflecting: − $184.2m increase in non-current inventory − $216.4m increase in current inventory • Luxury inventory increased
Slide 18: Regional presenters
Angus McPherson | ANZ Robert Foye | Europe & Asia Bob Spooner | Americas For personal use only Michael Clarke | Summary & Outlook 18
Slide 19: Australia & New Zealand
Australia & New Zealand ANZ regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m 1H17 1H16 % 1H16 % Reported currency Constant currency Volume (m 9Le) 4.2 4.2 0.3% 4.2 0.3% NSR (A$m) 322.8 318.1 1.5% 319.3 1.1% NSR per case (A$) 77.25 76.37 1.2% 76.66 0.8% EBIT
Slide 20: Europe
Europe Europe regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m 1H17 1H16 % 1H16 % Reported currency Constant currency Volume (m 9Le) 5.0 3.4 47.2% 3.4 47.2% NSR (A$m) 187.5 153.2 22.4% 132.7 41.3% NSR per case (A$) 37.82 45.50 (16.9)% 39.41 (4.0)% EBITS (A$
Slide 21: Asia
Asia Asia regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m 1H17 1H16 % 1H16 % Reported currency Constant currency Volume (m 9Le) 1.7 1.2 38.5% 1.2 38.5% NSR (A$m) 218.1 157.3 38.7% 156.6 39.3% NSR per case (A$) 131.77 131.65 0.1% 131.07 0.5% EBITS (A$m) 79.
Slide 22: Americas
Americas Americas regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m 1H17 1H16 % 1H16 % Reported currency Constant currency Volume (m 9Le) 7.9 7.1 12.6% 7.1 12.6% NSR (A$m) 566.3 450.8 25.6% 433.3 30.7% NSR per case (A$) 71.24 63.87 11.5% 61.39 16.0% EBITS (A
Slide 23: Summary and outlook
Summary and outlook For personal use only • TWE is transitioning from an agricultural, order-taking company to a brand-led, high performance organisation • Strong 1H17 result demonstrates execution of strategy and initiatives to deliver ongoing value accretion • 2H17 EBITS expected to be broadly in
Slide 24: Questions
For personal use only Questions 24
Slide 25: 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 26: Supplementary Information
Supplementary For personal use only Information 26
Slide 27: Appendix 1: Prior year comparative reconciliation – Profit & Loss
Appendix 1: Prior year comparative reconciliation Profit & Loss – 1H16 For personal use only Group P&L Regional P&L Change in Reallocation of Previously Accounting standard Reallocation of Previously $Am (unless otherwise stated) accounting Corporate & IT Restated Restated reported reported change -
Slide 28: Appendix 1: Prior year comparative reconciliation – Balance Sheet
Appendix 1: Prior year comparative reconciliation Balance Sheet For personal use only Balance sheet as at 31 December 2015 Balance sheet as at 30 June 2016 Change in Change in Previously Final purchase A$m accounting Restated Previously accounting reported A$m price accounting - Restated standard -
Slide 29: Impact of foreign exchange rate movements & hedging
Impact of foreign exchange rate movements & hedging 1H17 constant currency impact 2H17 EBITS sensitivity and risk management For personal use only CFX Impact (A$m) Currency Primary EBITS Movement Currency Underlying Hedging2 Total Pair Exposure Sensitivity (A$m) AUD/USD and AUD/GBP (20.9) 5.4 (15.5)
Slide 30: Foreign exchange exposures
Foreign exchange exposures ANZ Asiaand Asia Pacific • TWE has a diversified portfolio of currency exposures where For personal use only production cost currencies and revenue generating currencies are not matched • The map illustrate TWE’s key transactional foreign exchange flows by region • Moderat
Slide 31: Definitions
Definitions Term Definition For personal use only Throughout this presentation, constant currency assumes current and prior period earnings of foreign Constant currency operations are translated and cross border transactions are transacted at current year exchange rates NSR Net sales revenue EBITDAS
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