Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — Investor Presentation (June 2024)
49 slides from Treasury Wine Estates's investor presentation, Jun 4, 2024
Slide 1: Treasury Americas Luxury Estates Investor Presentation and F24 Guidance Reaffirmation
4 June 2024 ASX ANNOUNCEMENT Treasury Americas Luxury Estates Investor Presentation and F24 Guidance Reaffirmation Enclosed are the presentation materials for an investor and analyst presentation to be hosted by Treasury Wine Estates (ASX: TWE) at DAOU Vineyards in Paso Robles, USA commencing at 10:
Slide 2: EPS accretion and medium-term growth
o EPS accretion (pre-synergies) and mid to high single-digit EPS accretion (pro forma for cost synergies of US$20m+) in F25, the first full year of ownership1 o Over the medium term, average annual low double-digit NSR growth For the purposes of ASX Listing Rule 15.5, TWE confirms that this document
Slide 3: Treasury Americas Luxury Estates Investor Day
Treasury Americas Luxury Estates Investor Day 4 JUNE 2024, PASO ROBLES, CALIFORNIA
Slide 4: Important Information
Important Information All references to ‘$’ throughout this presentation refer to Australian Dollars, unless marked otherwise. This presentation is in summary form and is not necessarily complete. It should be read together with the Company’s other announcements lodged with the Australian Securities
Slide 5: Welcome and Introduction
Welcome and Introduction Tim Ford Chief Executive Officer, Treasury Wine Estates
Slide 6: Today's Presenters
Today’s Presenters Tim Ford Ben Dollard Neb Lukic Neil Cassidy Rachel Ashley Chief Executive Officer, President, Global President, Value Creation Officer, Senior Vice President, Treasury Wine Estates Treasury Americas DAOU Treasury Americas Supply Americas, Treasury Americas 4
Slide 7: Agenda
Agenda 9.00am DAOU Mountain arrival and welcome 10.00am Management Presentation Welcome and Introduction | Tim Ford Setting the Standard for the US Luxury Wine Experience | Ben Dollard Unveiling Success: The DAOU Story | Neb Lukic, Neil Cassidy Better Together | Ben Dollard, Rachel Ashley Closing |
Slide 8: Outlook
Outlook1 Group • We continue to expect mid-high single digit EBITS growth in F24, excluding the EBITS contribution from DAOU in 2H24 • Work to assess the future operating model for TWE’s global portfolio of Premium brands is continuing, with an update to be provided in August Treasury Americas • We
Slide 9: Treasury Americas: Setting the standard for the US Luxury wine experience
Treasury Americas Setting the standard for the US Luxury wine experience Ben Dollard President, Treasury Americas 7
Slide 10: Our vision is to boldly lead change
Our vision is to boldly lead change in the Americas wine market Over the past four years, we have transformed Treasury Americas’ brand portfolio and operating model to better meet the evolving needs of our consumers Following the acquisition of DAOU, we have the leading Luxury wine portfolio in the
Slide 11: US Wine Market Snapshot
US Wine Market Snapshot The market continues to evolve, and we are transforming our portfolio and operating model Short term trends Long term trends Challenging Luxury and Premium wine Distributor consolidation Tasting room visits and macroeconomic sales continue to grow continues and top DTC sales
Slide 12: The US Luxury Wine Opportunity
The US Luxury Wine Opportunity Highly supportive category dynamics for Luxury wine and Treasury Americas Wine category continues to premiumise as overall volumes decline but The US is the world’s largest luxury wine market consumers trade up Luxury wine retail sales by market1 US wine retail sales b
Slide 13: Profile of the US Luxury wine consumer
Profile of the US Luxury wine consumer Powerful Luxury trends provide Treasury Americas with a strong platform for long-term growth The drivers of Luxury wine consumption are diverse “Nearly 30% of wine consumers say they purchase a wine priced more than $20 monthly, Relaxation Social and Learning a
Slide 14: Treasury Americas Brand Portfolio Structure
Treasury Americas Brand Portfolio Structure Two distinct portfolios with differentiated priorities and approaches to market Luxury Estates Portfolio Premium Portfolio Pro forma portfolio composition1 NSR Luxury 55% $1,143m EBITS Luxury 69% $335m Premium Luxury SEPARATED SALES AND MARKETING FOCUS EFF
Slide 15: The US Luxury Wine Market Leader
The US Luxury Wine Market Leader The DAOU acquisition unlocked a significant long term growth opportunity for Treasury Americas eMarket Strengthened Significant Value Operating Model Leadership Portfolio Immediate Accretion Creation Optionality Created the number one Filled a significant Accelerated
Slide 16: An Exceptional Luxury Portfolio
An Exceptional Luxury Portfolio % Portfolio NSR1 50% 16% 13% 10% 9% n/a3 SRP2 range (US$) $20-$500 $40-$275 $35-$225 $40-$375 $35-$400 $25-$850 Weighted average $30 $50 $50 $55 $40 $55 SRP (US$) 1. Pro forma portfolio NSR composition reflection the combination of F23 Treasury Americas Luxury brands
Slide 17: Luxury Estates Portfolio Profile
Luxury Estates Portfolio Profile A diverse portfolio of scale, well positioned for the evolution of consumer and category trends NSR by price range NSR by sales channel 1.6 Volume m US$100+ DTC 17% US$20-$40 On Premise 20% 53% 22% CASES NSR $634m Pro Forma Metrics1 Off Premise Independents Off Premi
Slide 18: Treasury Americas Luxury Estates Strategy
Treasury Americas Luxury Estates Strategy Three core strategic priorities focused on realising the opportunity across our Estates portfolio 1 Scale our Estate-led brands and elevate our Luxury image • Leverage our distribution footprint and Luxury wine access to scale volume, balancing prestige with
Slide 19: Treasury Americas Luxury Estates
Treasury Americas Luxury Estates Attractive category Leading luxury portfolio Iconic luxury Outstanding World-class team fundamentals experiences asset base 17
Slide 20: DAOU: Unveiling success: The DAOU story
DAOU Unveiling success: The DAOU story 18
Slide 21: The journey of DAOU
The journey of DAOU. Passion, perseverance and obsession to create world class wines and extraordinary experiences at every touch point, focused on consumer happiness. We are a multi-faceted, high-growth Luxury wine business: • Luxury wines built for scale • Tiered portfolio strategy • Multiple rout
Slide 22: Founding and vision
Founding and vision It started as a dream, with global influence and French roots Lebanese roots French influence Brother Georges and Daniel After escalation of civil war in Daou’s childhood was steeped Lebanon, the family moved in Lebanese traditions of to France which is where generous hospitality
Slide 23: Paso Robles Roots
Paso Robles Roots Paso Robles is a world-class winemaking region in the central coast of California • The Paso Robles American Viticultural Area (AVA), located halfway between San Francisco and Los Angeles, was established in 1983: Paso Robles Luxury sales are growing ahead of other regions3 − Compr
Slide 24: DAOU Mountain
DAOU Mountain Our iconic brand home, rising from the heart of the luxurious Adelaida district of Paso Robles • Soaring at 2,200 feet elevation and 13 miles from the ocean, DAOU Mountain’s soils and the unique influence of the Templeton Gap combine to create a jewel of ecological elements that match
Slide 25: Signature wines
Signature wines An impressive portfolio ranging from bold Cabernets to elegant Chardonnays, each expressing the distinct character of Paso Robles Superior quality at an Dedicated to producing the worlds best red Soul of a Lion, the Setting the benchmark for approachable price blends, distinctively i
Slide 26: Commitment to excellence
Commitment to excellence We have a long and consistent track-record of producing highly rated wines • Our relentless pursuit of excellence has earned Product Robert Parker’s Annual Rating1 5Y avg. numerous accolades and awards, cementing DAOU’s reputation for some of the finest wines in the world Pa
Slide 27: Sustainability and community
Sustainability and community Committed to safeguarding our legacy and ensuring our community thrives for years to come Shepherds of our terroir for future generations Dedicated to enhancing the prosperity of our region • Beyond our desire to craft exceptional wines, we • We take immense pride in bei
Slide 28: Our journey is just beginning
Our journey is just beginning First phase of DAOU Mountain Jeb Dunnuck of DAOU+ Treasury Wine planting tasting room Wine Advocate launch Estates acquires opens tasting DAOU 2007 2008 2010 2013 2016 2019 2020 2021 2023 Georges and Hoffman Mountain National sales Patrimony Daniel acquire Ranch winery
Slide 29: Growth drivers
Growth drivers Focused on continuing DAOU’s strong top-line momentum, supported by an optimised cost base Base business plan Incremental opportunities Element Enablers Timing DTC platform expansion - Loyalty TOP-LINE Ahead of category growth for the Discovery and • Treasury Americas dedicated Luxury
Slide 30: Expanding our footprint
Expanding our footprint Treasury Americas deep Luxury distribution footprint to enable DAOU’s continued expansion DAOU US category-weighted distribution (CWD) by state1 • DAOU has achieved meaningful distribution % change versus 3 years ago presented in italics expansion in California and several ot
Slide 31: Ultra Luxury portfolio
Ultra Luxury portfolio An expression of the very best from Paso Robles • DAOU’s Ultra-Luxury portfolio, consisting Soul of a Lion Patrimony of Reserve, Soul of a Lion and Patrimony, are amongst the finest wines from The crown jewel Wines of immense Paso Robles of DAOU, and an power and longevity emb
Slide 32: Direct to consumer
Direct to consumer Leveraging our direct to consumer platform to drive experience and engagement Digital • DAOU+: our fully integrated platform combining e-commerce and membership to create a 1:1 relationship with the consumer − Facilitates tasting room and hospitality experience, in addition to pro
Slide 33: Delivering sustained growth
Delivering sustained growth We continue to outperform the category, particularly outside of California DAOU Portfolio Scan Channel Performance Latest 52 weeks % chg Latest 26 weeks % chg 25.7% 24.4% 24.3% 23.4% 19.8% 19.2% 19.0% 18.7% Volume change Value change Volume change Value change Total US Ou
Slide 34: Treasury Americas and DAOU: Better together
Treasury Americas and DAOU Better together Ben Dollard President, Treasury Americas Rachel Ashley Senior Vice President, Supply Americas, Treasury Americas
Slide 35: Integration Update
Integration Update Business integration to commence in F25 and on track to deliver synergies of US$20m+ • Planning for business integration and delivery of cost synergies Cost synergy initiatives progressing and well on track to commence in F25, as planned • Optimise sourcing for Discovery, Journey
Slide 36: Integrated supply chain
Integrated supply chain Integrated supply chain to be a significant source of strength for Treasury Americas Integrated supply chain to provide a scaled, efficient and flexible model to support DAOU’s long-term growth ambitions: − Significant ownership of vineyard area in Adelaida to enable accelera
Slide 37: Better together – realising the market opportunity
Better together – realising the market opportunity Bringing together two great businesses with complementary cultures • New Treasury Americas operating Treasury Americas operating model design model to be effective 1 July 2024, including separated sales and marketing teams for the Luxury Key design
Slide 38: Enhancing our distributor partnerships
Enhancing our distributor partnerships Allowing greater focus for our Luxury and Premium portfolios TWE CURRENT STATE TWE + DAOU FUTURE STATE • Strategic review of US distribution post acquisition has led to an enhanced partnership model • New model enables the Luxury portfolio focus DAOU PRE-ACQUIS
Slide 39: Luxury Estates Portfolio
Luxury Estates Portfolio Setting the standard for the US Luxury Wine Experience Relentless pursuit of the extraordinary Luxury Leader in Chardonnay 125 years pioneering the Stags Leap district First Growth Napa Cabernet Exceptional Napa Valley wine since 1876 A Global luxury icon 37
Slide 40: Frank Family Vineyards
Frank Family Vineyards Brand Story Key Wines A leader in Luxury Chardonnay Carneros Carneros Pinot Napa Valley Nestled in the shade of centuries-old elm trees, Frank Family Chardonnay $40 Cabernet Vineyards’ iconic tasting room has been a part of Napa Valley’s $40 Sauvignon landscape for over 30 yea
Slide 41: Frank Family Vineyards
Frank Family Vineyards Focused on leveraging our strengths to deliver growth for Frank Family Vineyards • TWE acquired Frank Family Vineyards for US$315m in Frank Family Vineyards Performance December 2021 NSR (US$m) and NSR per case (US$) • The acquisition business case is on track, focused on leve
Slide 42: Stags' Leap Winery
Stags’ Leap Winery Brand Story Key Wines 125 years pioneering the Stags Leap district Napa Napa Napa Valley Stags’ Leap Winery has always been driven by an indomitable Valley Valley Cabernet Chardonnay Petite Sauvignon spirit. Today, the famed winery, which is nestled in the heart of $35 Sirah $65 t
Slide 43: Beaulieu Vineyard
Beaulieu Vineyard Brand story Key wines First growth Napa Cabernet Napa Valley Rutherford Georges Few wineries have helped shape the craft, legacy, and legend of Cabernet Reserve De Latour Napa Valley as much as Beaulieu Vineyard. Founded in 1900 by Sauvignon Cabernet Private Georges de Latour, the
Slide 44: Beringer
Beringer Brand story Key wines Exceptional Napa Valley wine since 1876 With a legacy of more than 145 years, Beringer is California’s oldest continually operating winery and widely recognised as Knights Valley Private Reserve Private Reserve one of the most pivotal in the history of Napa Valley. To
Slide 45: Penfolds
Penfolds Brand story Key wines A global Luxury Icon Bin 704 Bin 389 Grange Since 1844, Penfolds has been grounded in experimentation, $70 $80 $850 curiosity and uncompromising quality. It is this pioneering spirit and curiosity that still rings true after nearly two centuries. Penfolds Californian c
Slide 46: Treasury Americas Outlook
Treasury Americas Outlook • Our Luxury Estates portfolio, an exceptional collection of Luxury brands with strong consumer connection, is well positioned to support the delivery of sustainable, long-term growth in Treasury Americas • As we approach F25, our focus is clear and centred on the following
Slide 47: Closing
Closing Tim Ford Chief Executive Officer, Treasury Wine Estates 45
Slide 48: Over the past four years, we have transformed Treasury Americas to be a Luxury focused business
Over the past four years, we have transformed Treasury Americas to be a Luxury focused business, with the US being the largest and one of the most attractive Luxury wine markets in the world The acquisition of DAOU establishes Treasury Americas as a leader in US Luxury wine. DAOU is an outstanding b
Slide 49: Definitions
Definitions 9Le 9 litre equivalent case Premium wine Wine that is sold at a retail price point between US$8 and US$20 per bottle AVA American viticultural area Commercial Wine that is sold at a retail price point below US$8 per bottle SG&A Selling, general and administrative wine CAGR Compound annua
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