Australian Vintage Ltd · ASX:AVG
Australian Vintage — H1 FY2010 Earnings Presentation
16 slides from Australian Vintage's earnings presentation, Feb 17, 2010
Slide 1: 2010 Half Year Result
For personal use only 2010 HALF YEAR RESULT 17 FEBRUARY 2010 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: Contents
Contents For personal use only Summary Results & Key Drivers Business Review 3
Slide 4: Solid result given industry turmoil
Solid result given industry turmoil • EBIT of $9.5m, up 67% from $5.7m last year: For personal use only – On constant currency basis EBIT $17.0m – Export EBIT $4.3m vs $3.1m last year offsetting significant negative FX – Domestic EBIT $3.4m up from a loss of $150k last year – Restructuring cellar do
Slide 5: Key drivers of the result
Key drivers of the result • Total sales down $29.8m due to: For personal use only – Changes to UK customer billing requirements with rebates included in total sales declining from $20m in first half 08/09 to approximately $5m in first half 09/10 – Impact of the strong A$ on UK and US sales (impact o
Slide 6: Cash flow positive with $21.4 million turn around
Cash flow positive with $21.4 million turn around For personal use only $M 2008 2009 Change Receipts from customers 150.6 141.7 (8.9) Payments to suppliers and employees (154.9) (125.3) 29.6 Temporary water licences (3.2) (1.1) 2.1 Interest and other finance costs (4.9) (6.3) (1.4) Total (12.4) 9.0
Slide 7: Business Review
For personal use only 7 BUSINESS REVIEW
Slide 8: Unchanged focus on three strategic priorities is delivering results
AVL’s unchanged focus on three strategic priorities is delivering results For personal use only • Grow Export • Build Defendable Brands • Maintain Low Cost Position Good progress in each despite industry turmoil 8
Slide 9: AVL continued to outperform the Australian wine industry in exports
For calendar year 2009, AVL continued to outperform the Australian wine industry in exports 2009 CALENDAR YEAR For personal use only (MAT year ending 31 Dec 09) Branded 56% +57% Private Label/Bulk AVL Net Sales +38% Growth on 09/10 +31% +33% vs Prior Year +28% +16% 9% +4% N/A N/A UK Europe Asia USA
Slide 10: Strategy One: Grow exports
Strategy One: Grow exports. Bottled export was strong, while bulk declined: due to firstly, UK promotional programs weighted towards branded and private label wine, and secondly, less aggressive bulk wine selling approach now that AVL’s wine inventory is in balance For personal use only First Half 2
Slide 11: Strategy Two: Defendable brands
Strategy Two: Defendable brands. AVL’s largest brand McGuigan continues to achieve strong growth driven by a focus on quality and market momentum following recent major awards For personal use only Brand McGuigan Performance Half Year 09/10 Performance: Total Sales = $33.2m YOY Case Growth = +61% YO
Slide 12: Strategy Three: Low cost
Strategy Three: Low cost. Progress continues to filter through results and asset productivity improves For personal use only • In late 2009, exited managed vineyard arrangements across four vineyards and moved to grape purchase arrangements with market pricing and lower grape tonnage commitment. Con
Slide 13: Segment profitability well up on prior year
As a consequence of restructuring and strong branded sales, segment profitability well up on prior year Half Year Ended Half Year Ended Change vs PY For personal use only $ million 31 Dec 08 31 Dec 09 Segment Review (a) Domestic wine division 39.7 37.7 (2.0) Export wine division 83.2 65.9 (17.3) Cel
Slide 14: Summary and Outlook
Summary and Outlook For personal use only • Australian wine industry undergoing structural transformation but AVL is well positioned to meet short term and medium term challenges • AVL result is solid given industry turmoil • AVL has successfully faced up to new industry model and outperforming the
Slide 15: Back Up
For personal use only 15 BACK UP
Slide 16: Significant Items
Significant Items For personal use only Half Year Ended Half Year Ended 31 Dec 08 31 Dec 09 $’000 $’000 Settlement received - 2,264 Merger costs - (1,111) Impairment of assets (97,916) (1,090) Provision for onerous contracts (76,613) 10,701 Significant items before income tax (174,529) 10,764 Tax be