Australian Vintage Ltd · ASX:AVG
Australian Vintage — FY2012 Earnings Presentation
28 slides from Australian Vintage's earnings presentation, Aug 22, 2012
Slide 1: 2011/2012 Full Year Results
For personal use only 2011/2012 FULL YEAR RESULTS Improved gearing and cash flow in a tough environment 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: Index
Index For personal use only Top Line Result Market Overview Results Summary FY12 Outlook 3
Slide 4: Top Line Result
For personal use only 4 TOP LINE RESULT
Slide 5: Shareholders Rewarded for Operating Profit Improvement
Shareholders Rewarded for Operating Profit Improvement For personal use only 1. Net profit up 8% to $7.1m 2. EBIT (after significant items) of $23.4m compared to $22.6m last year 3. Before significant items net profit declined by $3.2m due mainly to reduced yield from our owned vineyards 4. Cash flo
Slide 6: Strong Revenue Performance Despite Strong $A Impact
Strong Revenue Performance Despite Strong $A Impact For personal use only 1. Operating revenues amounted to $228.0m after unfavourable exchange rate movements of $3.9m 2. Operating Cash Flow positive $10.6m 3. Net debt to equity reduced to 54% from 69% last year 4. SGARA (fair value of grapes picked
Slide 7: Market Overview
For personal use only 7 MARKET OVERVIEW
Slide 8: 2012 a Standout Vintage for Quality
2012 a Standout Vintage for Quality For personal use only 1. Vintage estimated at 1.66 million tonnes 4% up on 2011. Expectations are that it will be recognised as a standout vintage in terms of quality 2. The higher crush is despite many regions reporting lower yields 3. While overall grape product
Slide 9: Australian Vintage Continues Response to Industry Challenges
Australian Vintage Continues Response to Industry Challenges – Focus on Branded Sales & Cash flow For personal use only 1. Continued focus on branded sales • McGuigan Wines ranked the World’s 19th most admired wine brand by UK trade publication Drinks International • McGuigan Wines entered the top t
Slide 10: Results Summary
For personal use only 10 RESULTS SUMMARY
Slide 11: Sales Summary
Sales Summary For personal use only Full Year Sales Dollar Sales ($’000) 2011/12 2010/11 % Change Australasia/North America packaged 79,371 82,033 (3%) UK/Europe 97,302 96,811 1% Cellar Door 6,913 6,975 (1%) Australasia/North America bulk wine and processing 40,550 33,876 20% Vineyards 3,826 3,522 9
Slide 12: McGuigan Brand Continues to Outperform
McGuigan Brand Continues to Outperform For personal use only The McGuigan brand continued its growth in both the domestic and export market. Overall, the McGuigan brand grew by 17% in volume to 2.4 million cases. In the domestic market the McGuigan brand experienced a 29% growth in volume and a 23%
Slide 13: Core Business Improving but Result Impacted Negatively
Core Business Improving but result impacted negatively due to lower vineyard yields and reduced For personal use only processing margins $’000 Results 2012 Results 2011 Change $’000 % Australasia/North America packaged 6,353 5,694 659 12 UK/Europe 7,098 5,366 1,732 32 Cellar Door 885 1,219 (334) (27
Slide 14: Domestic and Export Performance Improves in 2011/12
Domestic and Export performance improves in 2011/12 For personal use only The Australasia/North America segment improved its contribution by $0.7m due to improved branded sales partially offset by reduced contribution from lower margin cask sales. The UK/Europe segment contribution improved by $1.7m
Slide 15: Impact of Foreign Exchange Movements on Results and Business
Impact of Foreign Exchange Movements on Results and Business For personal use only • With approximately 61% of our total export sales in GBP, 6% in Euro and 2% in CAD, AVL’s exposure to exchange rates is significant. The balance of our export sales is in AUD. • The average weighted GBP in 11/12 was
Slide 16: Positive Cash Flow from Operating Activities
Positive Cash Flow from Operating Activities For personal use only 2012 2011 $m $m Operating Activities Receipts from customers 241.4 258.1 Payments to suppliers and employees (217.7) (244.5) Interest and other costs (13.3) (12.8) Other 0.2 0.5 Net cash from operating activities 10.6 1.3 Investing &
Slide 17: Improved Financial Position
Improved Financial Position For personal use only During the year borrowings reduced by $31.4m due to the sale of the Loxton winery and a positive cash flow from operating activities. Our gearing (net debt to equity) has reduced from 69% in 2011 to 54% in 2012. New 2 year banking facility signed in
Slide 18: FY13 Outlook
For personal use only 18 FY13 OUTLOOK
Slide 19: Outlook
Outlook For personal use only • Industry – will remain very challenging – oversupply continues to reduce – while grape production appears to be in balance, we are vulnerable to returning to oversupply because our bearing area could produce higher yields in future vintages – competition fierce across
Slide 20: Additional Information
For personal use only Additional Information 20
Slide 21: For personal use only
For personal use only
Slide 22: McGuigan named International Winemaker of the Year, again
For personal use only McGuigan named International Winemaker of the Year, again. At the 2011 International Wine & Spirits Competition McGuigan Wines was awarded: International Winemaker of the Year Australian Producer of the Year Trophy for ‘Best Semillon’ - 2006 Bin 9000 Semillon 34 medals
Slide 23: And the awards and recognition continued throughout 2012
For personal use only And the awards and recognition continued throughout 2012… McGuigan Wines ranked the World’s 19th Most Admired Wine Brand by UK trade publication Drinks International. Wedged between other premium wine brands Cheval Blanc and Domaine Romanee-Conti, McGuigan Wines was described
Slide 24: McGuigan Black Label Red reclaimed #1 selling branded bottled red
For personal use only McGuigan Black Label Red has reclaimed its position as the # 1 selling branded bottled red wine by volume (MAT 3rd June 2012). The Black Label Range grew +24% in FY12 vs LY. An outstanding achievement! The range continues to grow with the addition of new SKU’s Black Label Caber
Slide 25: The Semillon Blanc is the new 'IT' drink
For personal use only The Semillon Blanc is the new ‘IT’ drink Launched in July 2011, The Semillon Blanc has been well received with numerous reviews by key wine writers and consumer magazines such as Cleo, Gourmet Traveller Wine, Madison and Grazia. In FY13, this innovative and exciting product wil
Slide 26: We're achieving our business objective of growing branded sales
We’re achieving our business objective of growing branded sales… Range McGuigan Black +24% value growth. For personal use only Label Worth over $23M. Black Label Red reclaims spot as # 1 selling branded red wine by volume. Re-packaged sparkling range. Continue to add new SKU’s to drive incremental s
Slide 27: Highly awarded on the world stage
Highly awarded on the world stage… For personal use only Brand Award McGuigan Gold Sydney Wine Show 2010 Discover Pinot Grigio Gold Sydney Wine Show 2007 Bin 9000 Semillon Gold Sydney Wine Show 2003 Bin 9000 Semillon Trophy Pacific Rim International Wine Show 2011 Bin 7000 Chardonnay Gold Internatio
Slide 28: Significant Items
Significant Items For personal use only 2012 2011 ’000 $’000 Transaction Costs - - Provision for onerous contracts – write back - 865 Employment contract payment - - Impairment of Assets - Impairment of Loxton Winery - (4,425) - Impairment of other Assets - (3,201) Winery under utilisation costs - (