Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Presentation (February 2024)
41 slides from Endeavour's investor presentation, Feb 26, 2024
Slide 1: Endeavour Group H1 F24 Results Presentation
Endeavour Group H1 F24 Results Presentation February 2024
Slide 2: Group overview
Group overview Steve Donohue, CEO 2
Slide 3: Acknowledgement of country
Acknowledgement of country Artwork: Celebration Place by Riki Salam (Mualgal, Kaurareg, Kuku Yalanji)
Slide 4: Creating a more sociable future, together
Creating a more sociable future, together 4
Slide 5: Our vision is to be the leading platform enabling social occasions
Our vision is to be the leading platform enabling social occasions Leading customer Efficient end-to-end Capital allocation to One team living our Positive and offer and brands business drive growth purpose and values sustainable imprint Drive revenue growth Grow earnings ahead Deliver growth and At
Slide 6: H1 F24 performance highlights
H1 F24 performance highlights ● Resilient performance, with unrivalled value credentials resonating with customers ● Cost optimisation initiatives and gross margin Sales EBIT management drove EBIT slightly ahead of sales $6.7b +2.5% $661m +2.6% ● Profit after tax impacted by higher finance costs, in
Slide 7: Retail highlights
Retail highlights ● Sales growth accelerated through the half ● Focused on maintaining price leadership and delivering value ● Leading customer metrics in both Dan Murphy’s and BWS Total Retail sales Dan Murphy’s & BWS sales ● Transactions stable, with basket value growing +2.1% through positive mix
Slide 8: The destination for value, range and service
The destination for value, range and service H1 F24 Highlights Invested to increase Promotional planning Opened four new large My Dan’s membership price leadership, and execution delivered format stores and program grew to a record increasing average strong results across the renewed 12 stores 5.4 m
Slide 9: Delivering value and convenience
Delivering value and convenience H1 F24 Highlights Reinforcing value Continued portfolio BWS remains at the Highly successful brand through ‘A Win’s a Win’ investment with 12 new forefront of convenience, relaunch, including campaign, delivering stores (net), 31 renewals expanding customer activatio
Slide 10: Delivering products customers love
Delivering products customers love H1 F24 Highlights 7 in 10 customers The outstanding quality Integrated Cape Upgrade of Dorrien chose an exclusively of Pinnacle wine was Mentelle. Across the Winery completed which sourced or produced recognised with 677 portfolio we now have 22 will drive producti
Slide 11: Hotels highlights
Hotels highlights ● Sales growth underpinned by resilient demand and an improved food and bar offer 11 11 ● Expansion in food and bar margins offsets lower gaming mix Total hotel sales Comparable sales ● Disciplined cost management in response to inflationary pressures $1.1b +2.7% +1.2% ● Investment
Slide 12: Creating pub experiences locals love
Creating pub experiences locals love H1 F24 Highlights Reputation for value Improved menus Group optimisation pub+ customer app drives strong focused on value to program delivered development progressed customer customers whilst driving benefits through venue to testing, expecting to engagement and
Slide 13: Group optimisation program delivering material cost savings
Group optimisation program delivering material cost savings Retail GO Hotel GO Building robust and cross-functional capabilities to drive Building tools and processes that will optimisation benefits in cost savings help optimise Hotels operations. ● H1 F24 savings of $53 million benefiting GP and CO
Slide 14: Creating our positive imprint
Creating our positive imprint Responsibility and Community People Planet Advocating responsible choices and Championing individuality, supporting positive change in our communities Reducing our impact on human and personal rights the planet ● ● Dedicated to responsible leadership with 95% team ● Ach
Slide 15: Committed to shareholder value creation per our Strategy Scorecard
Committed to shareholder value creation per our Strategy Scorecard Revenue Grow revenue at or above market Earnings Mid-to-high single digit EBIT growth Sustainably Grow margin Capital discipline Cash conversion ratio of 90-110% Expand ROFE Deliver long-term Financial strength shareholder value Main
Slide 16: Financial Results
Financial Results Kate Beattie, CFO 16
Slide 17: H1 F24 Financial result highlights
H1 F24 Financial result highlights Financial strength Delivering Revenue & Earnings & Capital discipline for shareholders $6.7b +2.5% $914m H1 F23: $643m 19.6c -3.4% Sales Operating Cash flow Earnings per share $661m +2.6% 140% H1 F23: 99% 14.3c In line EBIT Cash Realisation Ratio Dividend per share
Slide 18: Group Financial Performance
Group Financial Performance $ million H1 F24 H1 F23 CHANGE ● Sales and EBIT growth in both Retail and Hotels Sales 6,667 6,502 2.5% ● Profit after tax reduced due to Retail EBIT 436 418 4.3% higher finance costs in line with Hotels EBIT 260 256 1.6% previous guidance Other EBIT (incl. corporate cost
Slide 19: Retail Financial Performance
Retail Financial Performance ● Strong execution underpinning Sales H1 F24 H1 F23 CHANGE growth in BWS and Dan Murphy’s Sales ($m) 5,583 5,446 2.5% ● Gross profit margin strength continued, EBITDA ($m) 593 568 4.4% supported by new product development, Depreciation and amortisation ($m) (157) (150) 4
Slide 20: Hotels Financial performance
Hotels Financial performance ● Improved food and bar offering delivering H1 F24 H1 F23 CHANGE sales and margin improvement; gaming revenue stable Sales ($m) 1,084 1,056 2.7% EBITDA ($m) 404 389 3.9% ● Optimisation program delivered in-venue cost efficiency Depreciation and amortisation ($m) (144) (1
Slide 21: Inventory
Inventory ● Comparable unit volume lower than H1 F23 Inventory Year-on-year Movement ● Unwinding inventory build in F23 that resulted Comparable unit from supply chain disruptions volume lower than H1 F23 $1,696m ● Value increased, due to cost of goods inflation $1,609m and product mix shift to high
Slide 22: Capital expenditure
Capital expenditure ● Balanced investments in Retail, including efficiency investment in the Pinnacle Dorrien Winery Retail Hotels: ● Lower Hotels capex with no incl. Pinnacle: acquisitions in the half and $66m $139m1 investment focused on multi-driver renewals $41m One Endeavour: ● Full year capita
Slide 23: Debt Management
Debt Management Net debt reduction in line with seasonality Net debt $1,927m ● Cash Realisation Ratio of 140% (99% H1 F23), benefiting from non-recurrence of H1 F23 inventory and tax timing outflows $1,546m ● Net debt of $1.5 billion, reduced by $381 million from end F23, largely due to seasonality
Slide 24: One Endeavour technology program on track
One Endeavour technology program on track Strategic Rationale Progress update F23 H1 F24 H2 F24 F25+ Completed and Inflight Transition and simplify technology landscape as a foundation for growth and innovation Spend Management Completed ＞ Modern, fit-for-purpose, lower cost technology Property Leas
Slide 25: Priorities and outlook
Priorities and outlook 2s endeavour 5 3,5 group
Slide 26: Outlook
Outlook ● Strong customer advocacy and our value positioning ensure we’re well positioned to perform through the economic cycle ● Continued focus on performance optimisation including disciplined cost and investment management ● Advancing Hotel portfolio renewal and unlocking value from our $1bn+ fr
Slide 27: Q&A
Q&A Steve Donohue Chief Executive Officer Kate Beattie Chief Financial Officer 27
Slide 28: Appendices
Appendices ndeavour oe = group NI ai 28
Slide 29: Strategy scorecard
Strategy scorecard Leading customer offer Efficient end-to-end Capital allocation to One team living our Positive and sustainable Efficient end-to-end and brands business drive growth purpose and values imprint business Drive revenue growth through Grow earnings ahead of sales Deliver growth and ret
Slide 30: Capital management framework supports growth and shareholder returns
Capital management framework supports growth and shareholder returns Operating cash flow (90-110% cash realisation) Targeting investment grade credit metrics Dividends Sustaining CAPEX ● Free cash flow deployed to dividends, capex, and debt reduction or returned 70–75% ● Stay-in One Endeavour to sha
Slide 31: Network
Network 1 271 +5 Dan Murphy’s stores2 17 5 55 428 1,447 +12 BWS stores 26 145 137 27 1 19 100 39 353 -1 Hotels (incl. managed clubs) Key: 2 3 85 394 55 Dan Murphy’s BWS 83 327 85 1 6 Wineries Hotels (incl clubs) Wineries 3 3 36 5 1 1 Bottling facilities Bottling facilities 1. As at 31 December 2023
Slide 32: Group sales composition
Group sales H1 F24 H1 F23 CHANGE composition BWS and Dan Murphy's 81.7% 81.4% 29 bps Specialty1 2.1% 2.4% -31 bps Gaming 6.5% 6.7% -23 bps Bars 5.0% 4.9% 9 bps Food 3.7% 3.6% 14 bps Accommodation 0.7% 0.7% 0 bps Other Hotels 0.3% 0.3% 2 bps Total 100.0% 100.0% 1. Specialty includes Jimmy Brings, Lan
Slide 33: Group financial performance
Group H1 F24 H1 F23 financial $ million (27 WEEKS) (27 WEEKS) CHANGE Sales performance Retail 5,583 5,446 2.5% Hotels 1,084 1,056 2.7% Total sales 6,667 6,502 2.5% Profit for the period Retail EBIT 436 418 4.3% Hotels EBIT 260 256 1.6% Other (35) (30) 16.7% Total EBIT 661 644 2.6% Finance costs (153
Slide 34: Balance sheet
Balance H1 F24 F23 H1 F23 sheet $ million 31 DEC 2023 25 JUNE 2023 1 JAN 2023 Trade working capital 592 778 545 Lease assets 3,271 3,208 3,211 Property, plant and equipment 2,187 2,095 1,973 Intangible assets 4,253 4,260 4,172 Other liabilities (net) (790) (731) (783) Funds employed 9,513 9,610 9,11
Slide 35: Cash flow
Cash flow H1 F24 H1 F23 $ million (27 WEEKS) (27 WEEKS) CHANGE EBIT 661 644 17 Depreciation and amortisation expenses 301 283 18 Changes in trade working capital 186 (33) 219 Changes in assets and liabilities and other non-cash items 49 127 (78) Finance costs on borrowings paid (54) (28) (26) Paymen
Slide 36: Historical Financial Performance
Historical Financial Performance1 COVID-19 unwind / Pre COVID-19 COVID-19 Post COVID-19 Retail H1 F19 H2 F19 H1 F20 H2 F20 H1 F21 H2 F21 H1 F22 H2 F22 H1 F23 H2 F23 H1 F24 Sales ($M) 4,564 3,889 4,777 4,509 5,690 4,488 5,657 4,429 5,446 4,459 5,583 EBIT 316 222 338 231 419 250 461 204 418 240 436 EB
Slide 37: Victorian gaming entitlement reconciliation
Victorian gaming entitlement reconciliation $310m in Victorian gaming entitlements were renewed during F23, resulting in the initial recognition of a $279 million liability owing to the Victorian Government. The balance outstanding at reporting date represents the initial value of gaming entitlement
Slide 38: Summary of forward looking statements
Summary of forward looking statements Area Description Group optimisation We are targeting $200 million of cost out initiatives across F24 - F26 to mitigate inflationary pressures and enable continued investment in line with strategy. Effective tax rate We expect the full year effective tax rate to
Slide 39: Comparative figures
Comparative figures Normalised 52-week Equivalent F19 Information and Equivalent F20 Information Woolworths' Drinks and Hotels businesses were transferred to, and merged Normalised 52-week Equivalent F19 Information relates to the results of with, Endeavour Group Limited on 2 February 2020 (Restruct
Slide 40: Glossary
Glossary Term Description CAGR Compound annual growth rate Cash realisation ratio Operating cash flow as a percentage of Group profit for the year after income tax but before depreciation and amortisation Cost of doing business Expenses which relate to the operation of the business (CODB) eCommerce
Slide 41: Disclaimers
Disclaimers This presentation is dated 26 February 2024 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, the Group, or Endeavour Group), and Endeavour Gro
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