Diamond Estates Wines & Spirits, Inc. · TSXV:DWS
Diamond Estates Wines & Spirits — Shareholder Meeting (September 2022)
22 slides from Diamond Estates Wines & Spirits's shareholder meeting presentation, Sep 28, 2022
Slide 1: President's Report
President’s President’sReport Report President’s Report Annual General Meeting September 28, 2022
Slide 2: Important Notice
Important Notice This presentation contains forward-looking statements, which can be identified by the use of the forward-looking terminology, such as but not limited to “may,” “intend,” “will,” “expect,” “anticipate,” “estimate,” “seek,” or “continue” or the negative thereof or other variations the
Slide 3: Risk Factors
Risk Factors The following risk factors should be carefully considered in evaluating an investment in Diamond Estates. The risks presented below may not be all of the risks that Diamond Estates may face. It is believed that these are the factors that could cause actual results to be different from e
Slide 4: F2022 Highlights
F2022 Highlights ❖ Strong revenue growth (+17%); offset by increased COGS / expenses as government support programs ended and expenses increased with covid waning ❖ Acquisitions are positively contributing to sales and gross margins ❖ Shiny Apple Cider facilities secured and licensed in July F23 ❖ R
Slide 5: Fiscal 2022 Financial Review
Fiscal 2022 Financial Review Fiscal 2021 Fiscal 2022 Change Revenue $25.6MM $30.0MM 17.2% Gross Profit $10.5MM $11.0MM 4.0% Gross Margin 41.2% 36.8% (4.4pts) EBITDA $0.8MM ($1.7MM) ($2.5MM) Adjusted EBITDA $0.1MM ($1.1MM) ($1.2MM) Net Income ($2.6MM) ($3.0MM) ($0.4MM) Earnings per Share ($0.13) ($0.
Slide 6: Balance Sheet Position
Balance Sheet Position The Company completed the purchase of Equity Wine Group and the Shiny Apple Cider brand through a convertible debenture and equity raise. With significant land, building, equipment and inventory holdings, total asset value increased greater than liabilities. Balance Sheet As a
Slide 7: Q1 2022 Financial Review
Q1 2022 Financial Review Q1 2022 Q1 2023 Change Revenue $7.4MM $7.5MM 1.3% Gross Profit $3.1MM $3.0MM (3.2%) Gross Margin (%) 41.9% 40.3% (1.6 pts) EBITDA $0.4MM ($0.9MM) ($1.3MM) Adjusted EBITDA $0.3MM ($0.7MM) ($1.0MM) Net Income ($0.4MM) ($1.7MM) ($1.3MM) Earnings per Share ($0.02) ($0.06) ($0.04
Slide 8: Acquisitions
Acquisitions Equity Wine Group and Shiny Apple Brand acquisitions for $11.1M and $2.2M respectively - Fair value of inventory adjustment took EWG to $15.1M valuation - Shiny product recall resulted in $1.1M of purchase being placed in escrow; 100% will be returned to DWS in October ❖ Portfolio gaps
Slide 9: Pandemic Impacts
Pandemic Impacts ❖ Licensee business returning to pre covid levels early F23 summer ❖ Winery on site retail stores nearing pre covid revenues, but International tourism remains at 25% of normal ❖ With covid waning, D2C sales have moderated, but consumers have grown to appreciate the benefits of wine
Slide 10: Grocery Success in Ontario
Grocery Success in Ontario VQA ❖ #2 VQA supplier with 14.2 SOM ❖ 20 Bees has 4 of the top 12 SKUS Import Wines • #4 supplier with 9% SOM • Josh #1 brand within all wine Cider • Shiny re-building distribution post product recalls in F22
Slide 11: Strengthening VQA: Innovation + Re-fresh
Strengthening VQA: Innovation + Re-fresh
Slide 12: Mindful – well positioned for Growth
Mindful – well positioned for Growth ❖ Only VQA low alcohol + low sugar ❖ Leverage Health & Wellness trend ❖ Strong LCBO support ❖ Sparkling and Merlot in F24
Slide 13: Lakeview Project Refresh
Lakeview Project Refresh Several core brands have been refreshed with excellent stakeholder response 20 Bees – Retail Tier 20 Bees– Premium Tier Fresh Re-design Lakeview Wine Co.
Slide 14: Strong Year in Ontario at the Wineries
Strong Year in Ontario at the Wineries ❖ Winery stores +51% YTD F23 with improved tourism ❖ Lakeview ❖ Premiumized experience at retail ❖ +$5 per bottle; + $10 pp group tours; +5 tasting fees ❖ Wine club doubled in price successfully ❖ Queenston Mile ❖ 35+ events supports positive EBITDA projections
Slide 15: On Premise Key Accounts
On Premise Key Accounts A dynamic and growing list of On Premise customers 12 | TSXV:DWS
Slide 16: Export Markets
Export Markets ❖ Revenue more than doubled in F22: $2.4M vs $1.1M in F21 ❖ Exports to China improved but continued to struggle with pandemic closures ❖ Very difficult Q1 F23 with Export driving the majority of the miss ($875k) - Russia order cancelled ($100k), Korea order delayed ($150k) and China s
Slide 17: Another Award-Winning Year!
Another Award-Winning Year! Award Highlights 2022 International Wine Challenge 2022 Lakeview Cellars Riesling Icewine – Gold + 95 points Ontario Wine Awards 2022 Lakeview Cellars Grand Reserve Red – Gold Creekside Backyard Block Sauvignon Blanc - Gold National Wine Awards of Canada 2022 Fresh Moscat
Slide 18: Trajectory Beverage Partners
Trajectory Beverage Partners Modest +3% growth with brand losses masking +20% organic growth New wins: CK Mondavi at Retail, Felix Solis, Gray Whale, Wize and McWilliams 15 | TSXV:DWS
Slide 19: Strategic Pillars for Value Creation F24-F26
Strategic Pillars for Value Creation F24-F26 Wineries Agency Premiumization Portfolio optimization Drive premium brands & channels Selectively augment portfolio Re-design / refresh Brands Drive scale with existing partners Increase prices Exploit insights for success Launch new tiers of products Mul
Slide 20: Funding for the Future
Funding for the Future Post a difficult 18 months, funding to support improved results required: ❖ $1.1M Shiny escrow ❖ $1.3M projected Winery Support Program ❖ $3.5M Convertible Debenture pending final decision ❖ Revised banking agreement in final negotiation 17 | TSXV:DWS
Slide 21: Summary
Summary ❖ Strong revenue and gross margin growth ❖ Acquisitions have filled portfolio gaps and added to capabilities ❖ All aspects of the business are being premiumized for profitability ❖ Grocery and D2C channels are competitive advantage for us and will create further growth opportunity going forw
Slide 22: Thank you for your continued confidence and support!
Thank you for your continued confidence and support! 18 | TSXV:DWS
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