Australian Vintage Ltd · ASX:AVG
Australian Vintage — FY2022 Earnings Presentation
28 slides from Australian Vintage's earnings presentation, Aug 24, 2022
Slide 1: FY22 Annual Results
FY22 ANNUAL RESULTS August, 2022 Presenters: Craig Garvin, CEO Adam Rigano, CFO
Slide 2: Disclaimer
Disclaimer The presentation has been prepared by Australian Vintage Limited (ACN 052 179 932) (“AVG”) (including its subsidiaries, affiliates and associated companies) and provides general background information about AVG’s activities as at the date of this presentation. The information does not pur
Slide 3: Overview: FY22 year in review
Overview FY22 year in review Continued strong global pillar brand performance, premiumisation and innovation have led to increased market share and margin improvement… • Market share growth across all key geographies despite global freight disruption • Pillar brand sales increased to 78% of total re
Slide 4: We pride ourselves on innovation to keep the consumer at the heart of everything we do
We pride ourselves on innovation to keep the consumer at the heart of everything we do Our Vision To be the first choice for every occasion Our Purpose Make the world a smaller place through sharing good times Our Mission We put the consumer at the heart of everything we do Our Values W I N E Workin
Slide 5: Our strategic plan continues to position us well for growth
Our strategic plan continues to position us well for growth… Consumers and Markets and People ESG Return on Assets Brands Customers Investing in pillar brands Significantly improved Staff engagement 70% Climate action towards Underlying ROCE 7.5% our business in Aus and Top Quartile Net Zero Pillar
Slide 6: FY22 underlying results demonstrating strong performance against our strategy
…with underlying results for FY22 demonstrating strong performance against our strategy Consumers and Markets and People ESG Underlying Return Brands Customers Pillar Brand Sales Outgrowing the market Employee engagement ESG journey advanced Underlying EBITDAS $203.2m +4% in key geographies (package
Slide 7: Investment in pillar brands has driven outperformance of wine category in key markets
Investment in pillar brands has driven outperformance of wine category in key markets …leading to AVL Pillar brands delivering top-line… Pillar brands all growing share outperforming in key markets $M Sales $ Shipments vs PY $ RSV vs PY Scan sales Wine -4% +8% CAGR Market +$29.0m 203.2 195.1 -5% -10
Slide 8: Safety is a core priority of the business
Safety is a core priority of the business Significant reduction in LTIFR Balanced approach to safety (Lost Time Injury Frequency Rate) • Continuing to enhance the safety of our people 17 • Global roll out of safety essentials program • Driving a safety priority strategy and aiming for zero harm • Im
Slide 9: Achievement-based culture with the right behaviours underpinned by employee engagement
We are well progressed on cultivating an achievement-based culture with the right behaviours underpinned by employee engagement Creating meaningful connections Fostering an inclusive achievement- Step-changing improvement in between AVL and our people based culture employee engagement • Behavioural
Slide 10: Strong financial performance in a difficult global environment
Strong financial performance in a difficult global environment Total Revenue EBITDAS EBITS $260.1m $48.2m (underlying)1 $33.3m (underlying)1 Other Pillar Brands 300 50 35 4.5 4.5 250 30 40 200 25 30 20 150 45.9 20 43.7 15 31.2 28.8 100 78% 35.4 21.7 60% 65% 71% 29.7 10 21.0 58% 10 24.2 16.8 50 5 0 0
Slide 11: Underlying income statement - strong underlying performance
Underlying income statement - strong underlying performance despite challenging market factors $m FY22 FY21 Fav/ (Unfav) FY 21 to FY22 Underlying NPAT Reconciliation % $ million Revenue 260.1 274.0 (5) Absorbed inflation Underlying EBITDAS 48.2 45.9 5 5.3 21.5 -1.0 EBITDAS margin (%) 18.5 16.8 10 20
Slide 12: One-Off Non-Recurring Costs
Income statement - strong performance despite challenging market factors $m FY22 FY21 Fav/ (Unfav) FY21 to FY22 Reported NPAT Reconciliation % $ million Revenue 260.1 274.0 (5) Absorbed inflation EBITDAS 43.7 45.9 (5) 5.2 EBITDAS margin (%) 16.8 16.8 - 20.1 Depreciation and (14.9) (14.8) - Amortisat
Slide 13: Balance sheet - strong underlying performance despite challenging market factors
Balance sheet - strong underlying performance despite challenging market factors $m FY22 FY21 • Higher strategic inventory FY22 FY21 Cash & equivalent 2.5 3.7 UK ensuring share growth. Net Debt (excl leases) $m 74.5 42.8 YE end inventory Receivables 44.8 51.6 marginally higher than Facilities Availa
Slide 14: Cash flow - impacted by higher inventory holdings and capital return to shareholders
Cash flow - impacted by higher inventory holdings and capital return to shareholders $m FY22 FY21 • Underlying cash flow from operating activities Cash from operating activities prior 34.5 34.2 higher than prior year to changes in assets/ liabilities and despite higher logistics one-off non-recurrin
Slide 15: Strategic outlook
Strategic outlook • Global inflation placing pressure on input costs in all markets • In the UK, inflation coupled with record global shipping costs have seen margin erosion for all suppliers • AVL addressing inflationary pressure through continued focus on higher margin branded wine, operational ef
Slide 16: Complementary portfolio of premium brands targeting differentiated consumer needs
Complementary portfolio of premium brands targeting differentiated consumer needs and occasions AVL Wine Brands Easy going, quality wine Celebrate any occasion your Premium wine crafted for Aspirational Barossa for me way sharing ‘Just Because’ ‘Beyond Tradition’ ‘Let it Flow’ ‘Barossa Strong’ Trust
Slide 17: Leverage great assets, know how and raw alcohol surplus to support high margin growth
Leverage great assets, know how and raw alcohol surplus to support high margin growth categories Collaborations Drinks Business Pillar Brands Drinks business (innovate) and collaborations (accelerate) will enable high margin growth globally as we build a consumer led portfolio 17
Slide 18: Focus on pillar brand investment to support new brand platforms
Focus on pillar brand investment to support new brand platforms Consumer insight driven brand platforms and partners… …Supported by upweighted investment Marketing Investment Index 190 183 125 100 A&P Index FY19 FY20 FY21 FY22 18
Slide 19: Utilising insights to guide our innovation program
Utilising insights to guide our innovation program to deliver incremental global growth consumer driven Delivering premium, consumer centric/disruptive NPD… …and market-leading performance • Pillar brands +4% annual sales growth • Premium innovation driving higher GM • New products, new markets 19
Slide 20: Drinks business underpinned by global consumer research and taps into Spirits / RTD
Drinks business underpinned by global consumer research and taps into dynamic Spirits / RTD categories that are 2X the size of wine New drinks portfolio addressing global category growth Insight driven, targeted category & consumer opportunity opportunities • Spirits/RTD is a $10bn category in Austr
Slide 21: #2 Total Alcohol Supplier, #1 Supply Chain, #5 Wine Supplier
Joint business planning approach – driven by consumer insight – to engage key customers globally Leveraging insights to drive pillar brand Working to fulfill full potential in core markets awareness & distribution Independent global customer forum gives supplier feedback in partnering areas #2 Total
Slide 22: High-margin Austflavour division a strategic priority
High-margin Austflavour division a strategic priority Well positioned with capability and know how to leverage global demand for specialised end products • Massive global opportunities • High margin, high value, grape juice and concentrate division providing unique winemaking products, confectionary
Slide 23: Leveraging our capability and knowhow to deliver a competitive advantage for innovation
Leveraging our capability and knowhow to deliver a competitive advantage for innovation 23
Slide 24: Leveraging our quality asset base to deliver a competitive advantage for pillar brands
Leveraging our quality asset base to deliver a competitive advantage for pillar brands Points strategy driving super premium growth +20% CAGR 24
Slide 25: Our ESG journey is well underway
Our ESG journey is well underway 25
Slide 26: AVL is committed to Net Zero carbon emissions by 2040
AVL is committed to NET ZERO carbon emissions by 2040, across Scopes 1, 2 & 3. We have taken a science based approach to be validated by the Science Based Targets Initiative. 26
Slide 27: Making a positive impact on people and planet
Making a positive impact on people and planet • Head of Sustainability and team appointed • Environment • Climate action towards Net Zero • Transitioning all owned and managed sites to 100% renewable energy sources • Working towards Sustainable Winegrowing Australia certification • APCO 2025 sustain
Slide 28: OMCGUIGAN
OMCGUIGAN ZERO | MUVIGNON BLANC @ MEGUIGAN BLACK RED Ay AVL WINES ALTITUDE