Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Day (May 2022)
79 slides from Endeavour's investor day presentation, May 26, 2022
Slide 1: Investor Days 26-27 May 2022 Day One
Dan Murphy’s Como, WA Investor Days 26 - 27 May 2022 Day One
Slide 2: Introduction to Endeavour Group
Dan Murphy’s, Gawler, SA Introduction to Endeavour Group Steve Donohue Chief Executive Officer
Slide 3: Acknowledgement of Country
Acknowledgement of Country Calling Country Whale Gadigal People
Slide 4: Creating a more sociable future together
We’re We’re Our Values We’re real inclusive responsible Creating a more sociable future together Our Ways We work We’re team We endeavour of Working with spirit players for better
Slide 5: Commitment to our imprint
Coopers Alehouse, Gepps Cross, SA Commitment to our imprint Responsibility People Planet and Community Championing individuality, Reducing our impact human and personal rights on the planet Advocating responsible choices and supporting positive change in our communities
Slide 6: This is Endeavour Group
This is Endeavour Group Large and engaged customer base Complementary collection of assets Pivotal role in our industry Large customer base Brands Support suppliers and partners Annual ~200m ~4.4m Active loyalty ~3k Number of 730 New supplier interactions members suppliers partners Highly engaged Di
Slide 7: Our vision is to be the leading platform enabling social occasions
Our vision is to be the leading platform enabling social occasions NETWORK BRANDS ASSETS DIGITAL PRODUCTION PLATFORMS ASSETS CUSTOMERS PARTNERS
Slide 8: We're well positioned to achieve this vision through combined retail and hotels
We’re well positioned to achieve this vision through our combined retail and hotels businesses 3. Decide to head into 4. Try your luck in the 5. Order and pay for 6. Notice on a media the Forest Hotel to newly renovated dinner using the screen that your watch the Sunday gaming room or me&u app, prep
Slide 9: We have started the journey to achieving our vision
We have started the journey to achieving our vision Where Stood up Endeavour as an independent entity while maintaining we’ve been momentum in the business Where we Building foundations for future growth and seeding innovation are now Where Driving ongoing growth in our core business, and using our
Slide 10: Where we've been: Maintained momentum while standing up Endeavour
Where we’ve been: Maintained momentum while standing up Endeavour • Grown My Dan’s active members by ~20% in the last 12 months (to end Q3 F22) Grown customer reach • Dan Murphy’s VOC up 1pt to 79 & BWS VOC up 3pts to 74 (Q3 F22 vs. Q3 F21) • Hotels external customer online reviews up 0.1pts to 8.4
Slide 11: Where we are now: Managing short-term imperatives
Where we are now: Managing short-term imperatives Post COVID-19 Inflationary pressure and Evolving partnership Talent shortages normalisation rising interest rates with Woolworths Expect our core markets to Expect inflation to increase wages, COVID-19 has exacerbated Continue transitioning from norm
Slide 12: Where we are now: Building the foundations to deliver our vision
Where we are now: Building the foundations to deliver our vision Step-change digital Enhance and Optimise the Group engagement expand our network • Enable discovery in Dan Murphy’s • Continue to optimise our offer in the • Unlock value through our end-to-end through personalised My Dan’s offers ~2,0
Slide 13: Where we are now: Seeding innovation
Where we are now: Seeding innovation Driving trend creation and Innovative customer offerings brand innovation Developing partnerships: Retail Media • Enhancing Hotels’ digital • Driving innovation to create the next • Retail Media is a new capability within experience through trends in the market m
Slide 14: Where we're going: Bringing our strategy to life
Where we’re going: Bringing our strategy to life Leading customer Efficient end-to-end Partnerships that grow One team living our Positive and sustainable offer business our industry purpose and values imprint • We have a rich • We continuously grow • We have expanded our • We have created a culture
Slide 15: Our purpose, vision and strategy: Delivering strong returns
Our purpose, vision and strategy: Delivering strong returns OUR STRATEGY OUR PURPOSE OUR RESULTS Creating a more sociable future together… Sustainable shareholder value creation OUR VISION Leading Efficient Partnerships that customer offer end-to-end grow our industry To be the leading business plat
Slide 16: Capital Management
Capital Management Shane Gannon CFO Breakfast Creek Hotel, Brisbane, QLD
Slide 17: Our capital management framework supports growth and strong shareholder returns
Our capital management framework supports the growth and delivery of strong shareholder returns Strong free cash flow deployed in line with our capital management Operating Cash Flow (high cash realisation) framework Targeting Investment Grade Credit Metrics 1. Target outcomes consistent with invest
Slide 18: Our capital allocation aligns to our strategic priorities
Our capital allocation aligns to our strategic priorities Strategic Alignment Stay in Business (SIB) Enabler Maintenance Capex to sustain operations, core systems, safety and compliance Technology Transition Sustaining Transition and simplify technology landscape as Technology transition (~56% in F2
Slide 19: Sustaining Capex
Sustaining Capex Stay In Business Technology Transition Renewals Maintenance capex to Transition and simplify Renew the existing fleet of sustain operations, core technology landscape as stores, hotels, EGMs Focus systems, safety and a foundation for growth, aligned to target lifecycle; introduce co
Slide 20: Growth Capex
Growth Capex Network expansion Property Digital, data and and optimisation redevelopments eCommerce Expand and optimise the network: Major site redevelopments to Digital and data transformation to Focus new stores, hotels, production assets maximise value; integrated deliver enhanced eCommerce and a
Slide 21: Track record of multifaceted Retail investments delivering strong returns
We have a track record of multifaceted Retail investments delivering strong returns Format Omni-channel eg. innovations Drive-Thru and Click & Collect innovations Customer Range experience optimisation, including Pinnacle brands and NPD eCommerce penetration and In-store digital, performance improvi
Slide 22: Early stages of leveraging our capability across Hotels
We are in the early stages of leveraging our capability across Hotels Longer term property redevelopment opportunities being explored to maximise value New & renewed accommodation offering Customer experience and loyalty Bar & restaurant renovations In venue digital experience Gaming room renewals I
Slide 23: Forest Hotel: Applying our capital allocation and capability in practice
Forest Hotel: Applying our capital allocation and capability in practice Investment Profile ⁓$20 million investment Complete redevelopment - site reopened December 2020 Trading ahead of expectations with >15% ROI Expanded food and beverage offering New sports bar, outdoor dining areas and gaming roo
Slide 24: Q&A
Q&A Broadbeach Photo Tavern, caption here QLD
Slide 25: Retail overview
Retail overview Steve Donohue Chief Executive Officer Dan Murphy’s Double Bay, NSW
Slide 26: Our retail brands
Our retail brands Key retail brands One of Australia’s most trusted destinations for drinks discovery, with 258 stores and 28,000+ products online Offers some of the most convenient ways to buy drinks, with ̴1.4k stores supporting an expanding on-demand digital offer Specialty retail brands Australi
Slide 27: Our supporting Group capabilities
Chapel Hill Cellar Door Our supporting Group capabilities Covered over the next two days… • Merchandising: manage range and value by partnering with suppliers and leveraging customer insight and data • endeavourX: manage Group’s digital platforms to deliver a seamless omnichannel customer experience
Slide 28: Retail financials at a glance
Retail financials at a glance F181 F191,2 F203 F21 Elevated sales since F20 Sales ($b) 8.2 8.6 9.3 10.2 due to COVID-19 Sales normalising as COVID-19 impacts reverse and on-premise EBIT ($m) 516 504 569 669 reopens Gross Margin (%) N/A N/A 23.1 24.2 Strong margin expansion EBIT to sales (%) 6.3 5.9 6
Slide 29: Dan Murphy's
Dan Murphy’s Alex Freudmann Managing Director, Dan Murphy’s Dan Murphy’s Gawler, SA
Slide 30: Dan Murphy's at a glance
Dan Murphy’s Cellar, Lane Cove, NSW Dan Murphy’s at a glance Our footprint Our customers Our online presence 258 4.0m 56% Stores Active membership Growth in online orders program users 7k 79 52% Total team members; 248 Sales originate online Wine and Spirit Education Customer VOC NPS score Trust (WS
Slide 31: Dan Murphy's helps you Drink Better
First on new trends and support local innovation Guarantee the lowest price and best value for customers while achieving a higher average selling price than market Enable drinks discovery through innovative store formats, knowledgeable team members and personalised, rich content online Dan Murphy’s
Slide 32: Lowest Prices and market leading average sell price
Lowest Prices and market leading average sell price (‘ASP’) Pepperjack Shiraz 750ml AV. SELLING PRICE FY22 YTD THE MARKET DAN MURPHY’S $20.16 $17.04 (-15.5%) Red Wine ASP Overall: ~$13.90 $14.81 (+6.6%) Dan Murphy’s Cellar, Prahan, VIC
Slide 33: Mil Z customers are fuelling our sales growth
Mil Z customers are fuelling our sales growth and engaging with our brand as their #1 preference #1 Instagram following (115k+) in the liquor retailing category 25% Share of total sales from Gen Z and Millennials ~35% Total customers are Gen Z and Millennials Survey: ‘Imagine you had to choose just
Slide 34: Our business model has rapidly evolved to support ecom growth
Our business model has rapidly evolved to support the growth of ecom and customer’s preferences Where did transactions Where do transactions Where do products originate in 2010? originate today? change hands today? Bricks & Mortar 100% Customer’s Home 4% Bricks & Mortar 48% Digital 52% Bricks & Mort
Slide 35: Dan Murphys
ene Dan Murphys THERE WAS Daniel Francis Murphy | ff e : & ; DanMurphys
Slide 36: Dan Murphy's Strategic Growth Drivers
Dan Murphy’s Strategic Growth Drivers Discovery Memorable Experiences Personal Interactions Team & Community We drive for trend leadership We enable the most We create personalised We are a responsible business to help customers discover engaging end-to-end moments that are relevant enabling our tea
Slide 37: Drive Discovery
We drive for trend leadership to help customers discover new drinks experiences Deliver the future customer experience with engaging in-store formats, best-in-class customer service and engaging content Continue to work with Pinnacle, our merchandising team and suppliers to leverage customer insight
Slide 38: Memorable Experiences
We enable the most engaging end-to-end customer experience Create new frictionless and memorable experiences underpinned by technology in new services like subscription, licence plate-recognition Drive-Thru’s and premium events Expand, renew and differentiate our store formats for different shopping
Slide 39: Personal Interactions
We create personalised moments that are relevant to our customers Drive personalised discovery across our digital channels with real-time recommendations and rich, relevant content Enable and scale personalisation into our stores, for example through our Signature Service platform Continuously evolv
Slide 40: Team & Community
We are a responsible business enabling our teams and community to perform at their best Invest in our talent and team capabilities, in particular, building our team members’ product knowledge to enable customer discovery Reinforce our diverse and welcoming culture where everyone belongs Demonstrate
Slide 41: Dan Murphy's in Summary
Dan Murphy’s in Summary Unique self-reinforcing business proposition that has created a sustainable competitive advantage Evolving our proposition to accelerate growth with Mil Z customers through trend leadership, experiential store formats and digital innovation Investing in our digital transforma
Slide 42: BWS
BWS Scott Davidson Managing Director, BWS BWS, Glebe, NSW
Slide 43: BWS at a glance
BWS at a glance Our footprint Our customers Our online presence 9,000+ 26 81% Team members Customer NPS Growth in online orders ~1,400 300,000 Stores throughout Australia Average monthly active app users 76% 76% Online Onlineorders orders delivered delivered viavia express, ~3,800 ~1m with remaining
Slide 44: Drinks Your Way
Well known, trusted and loved brand in the local community that offers some of the most convenient ways to buy drinks Valued connections with local communities through hyper localised range and format Expansive footprint across Australia, underpinned by a large store network in convenient locations
Slide 45: Drinks Your Way: store formats and network
BWS does We operate a range of store formats, all of which support Drinks our convenience led customer mission Your Way. 790 Attached 314 Standalone 16 412 146 93 365 321 228 Drive 79 Metro 23 35 We operate in all …across a range of store formats …and offer a locally curated range major communities…
Slide 46: BWS on tAPP and Cooler campaigns
BWS does We know our customers and are making advances via Drinks BWS on tAPP, positioning the app as the front door to our brand for the omnichannel customer Your Way. BWS on tAPP launch Cooler 1 Cooler 2 Cooler 3 (Aug - Oct 2019) (Nov 2019 - Feb 2020) (Nov 2020 - Feb 2021) (Jan - Feb 2022) 10k 72k
Slide 47: BWS strategic growth drivers
BWS strategic growth drivers Team Local Convenience Enable our team to spark Lead in local trends through ultra Revolutionise convenience moments with customers local range and experience enabled and deliver a seamless by world class store formats omnichannel experience
Slide 48: Team
Enable our team to spark moments with customers Invest in digital tools that enable our in-store team members to better connect with and serve customers Accelerate our listening framework that helps bring our team members’ innovative ideas to life BWS strategic growth drivers Elevate team learning,
Slide 49: Local
Lead in local trends through ultra local range and experience enabled by world class store formats Activate store format innovation and differentiation that are relevant to each local community Supercharge localisation through a curated and optimised range at the store level BWS strategic growth dri
Slide 50: Convenience
Revolutionise convenience and deliver a seamless omnichannel experience Grow BWS On tAPP to become a market leading app Accelerate the evolution of our delivery, pick-up, and Drive-Thru proposition that blurs the line between in-store and online BWS strategic Grow our eCommerce partnerships to deliv
Slide 51: BWS in summary
BWS in summary Over the next few years, we’ll focus on: BWS is one of the largest Empowering our team to be themselves, have and most convenient drinks fun and spark moments with customers retailer in Australia - we do Drinks Your Way. We will continue to leverage our Supercharging the local experie
Slide 52: Merchandising
Dan Murphy’s, Gawler, SA Merchandising Tim Carroll Director, Buying and Merchandise
Slide 53: Merchandising at a glance
Merchandising at a glance Performance / Value $680m Gross margin improvement +50% Growth in Pinnacle sales since F19 2 1.24m Prices beaten every year since F161 Range 18% Ofcommunity range connected to & purpose +40% Oftoday sales from come from 250 Average new products launched each week range that
Slide 54: Merchandising at a glance
Merchandising at a glance Manage range and value by partnering with suppliers and leveraging customer insight and data Trading Trading Deliver commercial and customer outcomes by managing trading terms with our suppliers and overseeing our pricing structure Range and value Maintain and cultivate our
Slide 55: Our unique advantage lies in driving positive outcomes
Our unique advantage lies in our ability to drive positive outcomes for customers, suppliers and the business while also building for the future Deliver value in Create the trends Be the preferred Leverage data and Develop an industry an inflationary that are relevant to retailer to do digital capab
Slide 56: Deliver value in an inflationary environment
Deliver value in an inflationary environment We are able to manage end-to-end price realisation with Delivering exceptional value for our customers our approach to better buying and pricing Liquor tracker - “offers good value for money” Cost price Sell price 70% management management 60% Supplier ter
Slide 57: Create the trends that are relevant to current and future customers
2. We contrast with 1. current sales Create the trends We review leading to determine local market and that are relevant to indicators category relevance current and future Trend & size of prize customers Identification • Global Trends • Social Listening & Search Trends • Macro Trends • Liquor Trends
Slide 58: Create the trends that are relevant to current and future customers
Create the trends that are relevant to current and future customers We have a track record of accelerating trends This ability unlocks significant (e.g. no / low alcohol drinks) growth across our retail brands • MACRO TRENDS:‘Wellbeing’ and ‘Responsible Communities’ 20152 2021 • LIQUOR TRENDS: Moder
Slide 59: Be the preferred retailer to do business with
Be the preferred retailer to do business with Supplier ranking of preferred retailers Voice of Supplier (VOS) (Annual Mirror Report) 49% 2020 2021 46 48% 46% 45% % 44% 43% 46% 41% 1 39% 3 38% 37% 36% 35% 35% 32% 29% Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jul-21 8 5 BWS Endeavour Dan Murphy’s
Slide 60: Supplier of the Year Awards
Supplier of the Year Awards We recently held our first inaugural Supplier of the Year Awards on the 12th of May. Over 500+ suppliers attending our first in person event in over 2 years at the Timber Yard to celebrate all our suppliers big and small.
Slide 61: Leverage data and digital capabilities to activate new growth avenues
Leverage data and digital capabilities to activate new growth avenues We continually innovate to unlock efficiencies and new growth by: • Building AI-driven pricing and promotions capability • Accelerating personalisation and new media assets • Continually improving our understanding of customers an
Slide 62: In summary
In summary • Merchandising is a key enabler for the Group; we have a proven track record of unlocking sales / margin growth • Our strong foundations enable us to effectively navigate the current inflationary environment • We are accelerating our investment in data and analytics capabilities to unloc
Slide 63: Q&A
Header here Q&A Xxxxxxxxxxx Retail and •We have 10 People commitments for example: Merchandising •Achieve senior leadership and Board diversity balance of 40:40:20 (leadership levels 4-6) and build a strong pip eline (level 3) of diverse leaders for the future •By 2025, achieve Bronze Tier employer
Slide 64: Australian Leisure & Hospitality
Australian Leisure & Hospitality Mario Volpe, Managing Director, Hotels The Rogue Squire, Wheelers Hill, VIC
Slide 65: HOTELS at a glance
HOTELS at a glance Our footprint Our customers Our digital presence 344 8.4 227k Hotel network VOC Average monthly (including clubs) order & pay at 569k table users 11k Average monthly engaged 553k Team members social media users Average monthly 12,540 website visitors EGMs Note: All data is either
Slide 66: The evolution of HOTELS
The evolution of HOTELS We have a rich history dating back 50 years SHAPED BY TRENDS 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s The 6 o’clock The birth of Family The emergence Masterchef Effect, Digitisation of swill era Australian Rock Dining of gaming emergence of bars Hospitality and fast casual M
Slide 67: Our HOTELS footprint
Our HOTELS footprint We have a network of local venues that operate in a large addressable market We have 344 local venues across Australia And operate in four market segments 4 Bars 5.6 Accommodation 5.4 132 28 Australian 35 market size ($bn) 55 Gaming Food 6.2 5.9 85 5 All sites are supported by o
Slide 68: HOTELS at a glance: key financials and priorities
HOTELS at a glance Key financials and future financial priorities F181,2 F191,2,3 F202 F214 Build a strong platform for growth post COVID-19 Continue to invest in our hotels, retain and upskill our Sales ($ million) 1,612 1,671 1,320 1,417 team members and deploy new digital services EBIT ($ million)
Slide 69: Market leading integrated offer
Market leading integrated offer FOOD BARS GAMING ACCOMODATION DIGITAL 300+ 900+ 300+ 110+ 119k Bistros Bars Rooms Properties Daily food & beverage transactions 250+ 11k 300+ & 290+ 2,450 193k Function rooms Average monthly TAB & Keno outlets Rooms Average monthly ticket sales tables booked Bistros t
Slide 70: Our strategic growth drivers
Our strategic growth drivers We are community minded, with a deep commitment to our responsibilities. Our People Our Experience Our Platform Moments That Matter Local & Authentic Easy & Convenient Simplify & Fly Portfolio Management
Slide 71: Moments that matter
Our teams are empowered to create memorable moments for our guests Grow team advocacy for the business by reinvigorating the Australian Leisure and Hospitality identity Provide our team with fulfilling career pathways Moments that matter Team members, Como Hotel, WA
Slide 72: Local & Authentic
We bring each pub’s story and potential to life to create rich and fulfilling experiences for our guests Deliver a truly local experience through greater differentiation across our offer Step change the formats we deploy through our renewal program Grow our share of Gen Z and millennial customers by
Slide 73: Easy & Convenient
We’re enhancing our digital and data capabilities to better support our customer value proposition Unlock meaningful customer experiences through personalisation Deliver convenient, frictionless and innovative venue experiences across bookings, ordering, payment and gaming Build a digital platform a
Slide 74: Simplify & Fly
We’re harnessing our group capabilities to innovate, grow and improve productivity Optimise venue operations e.g. process simplification, tap menu optimisation Share best practices across venues e.g. marketing, rostering etc. Simplify & Fly Coopers Ale House, Gepps Cross, SA
Slide 75: Portfolio Management
Victoria Hotel, Goondiwindi, QLD We’re investing for the future with a disciplined and progressive approach to capital and portfolio management Drive strong returns progressing against our renewal pipeline Unlock our land bank opportunity and increase our site utilisation rate Deliver high potential
Slide 76: Sustainability & Responsibility
We have a deep commitment to responsibility and sustainability Continue to embed our industry leading approach to responsible gaming in all venues Invest to build a predictive algorithm to identify potential problem gambling early Trial the broader use of facial recognition Sustainability & Responsi
Slide 77: HOTELS In summary
HOTELS In summary Positive momentum as the industry bounces back from COVID-19 disruptions Growth unlocked by focusing on the customer - leveraging our digital assets, new occasions and offers Portfolio management presents a significant opportunity to drive value Elsternwick Hotel, Elwood, VIC
Slide 78: Q&A
Q&A Albion Hotel, Albion, QLD
Slide 79: Disclaimers
Disclaimers This presentation is dated 26 May 2022 and unless stated otherwise is current as at that date. This presentation contains summary and general information about Endeavour Group Limited and its controlled entities (together, ‘Endeavour Group’), and Endeavour Group’s activities as at the da