Australian Vintage Ltd · ASX:AVG
Australian Vintage — Shareholder Meeting (November 2009)
37 slides from Australian Vintage's shareholder meeting presentation, Nov 25, 2009
Slide 1: Annual General Meeting 25 November 2009
For personal use only ANNUAL GENERAL MEETING 25 NOVEMBER 2009 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: Today's Agenda
Today’s Agenda For personal use only Performance Summary Ian Ferrier Business Update Dane Hudson Formal Proceedings Ian Ferrier 3
Slide 4: Annual General Meeting
For personal use only ANNUAL GENERAL MEETING 25 NOVEMBER 2009 4
Slide 5: A fundamental imbalance in the industry
A fundamental imbalance in the industry SUPPLY For personal use only • Australia is making 20-40 million cases excess to demand – on top of a stock pile of up to 100 million cases • 17% of vineyard capacity is uneconomic – Great Southern collapse – Over $700m worth of vineyards for sale – Public win
Slide 6: 2009: AVL faced up to new reality and outperformed the industry
2009: AVL faced up to new reality and outperformed the industry For personal use only • Strategic plan on track – Asset and grape supply restructuring almost complete – Costs down by $16 million • AVL sales outperform industry – Sales up 9% versus last year to $288.3 million – Export and branded sal
Slide 7: Opportunities in merger with Constellation Australia/UK
Opportunities in merger with Constellation Australia/UK • Constellation Brands Limited, a world leading wine company For personal use only – 100+ brands, 150+ countries – Largest wine company in Australia and UK – 25 million case Australian business – UK and Europe: 5 of top 10 selling brands – Worl
Slide 8: Outlook
Outlook For personal use only • Industry remains challenging – Oversupply continuing – High Australian dollar – Competitor asset actions, including sales of written down stock • Trading in Q1 in line with expectations • Targeting +100% NPAT growth in FY2010, assuming no further deterioration in FX 8
Slide 9: Business Review
For personal use only BUSINESS REVIEW DANE HUDSON 9
Slide 10: Topics for Review
Topics for Review For personal use only 1. Market Overview 2. Progress against Strategic Priorities 10
Slide 11: Supply Demand Imbalance continued
Supply Demand Imbalance continued… For personal use only Vintage Crush versus Industry Sales (M Litres) Financial Year 2004 2005 2006 2007 2008 2009 Prior Year Vintage Crush 1,125 1,425 1,425 1,425 1,050 1,350 Industry Sales 995 1,087 1,171 1,245 1,136 1,181 Annual Oversupply 130 338 254 180 (86) 16
Slide 12: Provisions were driven by industry oversupply and review of asset values
Provisions were driven by industry oversupply and review of asset values For personal use only Pre-Tax Writedown ($m) Provision for onerous grape contracts 76.6 Inventory impairment adjustment 66.5 Impairment of goodwill and other intangibles 12.5 Revaluation of vineyards 9.5 Other 9.4 174.5 12
Slide 13: AVL has been transforming its business since 2006
AVL has been transforming its business since 2006 with an overriding objective to become a great commercial wine company with strong cash flow, solid production base and flexible supply For personal use only Strategic Priority 08/09 Progress 1. Grow Export Sales and Build 9Grew export sales 14% over
Slide 14: FY09 Sales: AVL outperforms industry
FY09 Sales: AVL outperforms industry For personal use only AVL Net Sales for 2008/09 versus 2007/08 30% 25% 24% 20% 15% 14% 10% 6.2% 6% 5% 2.2% Total 0.8% Export N/A 0% AVL Aust AVL Aust AVL Total AVL -5% Aust Industry Aust Industry Export Export Export -10% Volume Value Volume Value -10% -15% Packa
Slide 15: Branded strategy on track
Branded strategy on track For personal use only Full Year Branded Sales Case Sales (‘000) Dollar Sales ($’000) % % 2007/08 2008/09 2007/08 2008/09 Change Change Export Branded 1,801 2,112 +17% 80,594 87,236 +8% Australian Branded 1,743 1,521 -13% 60,737 58,910 -3% Total 3,544 3,633 +3% 141,332 146,1
Slide 16: Brand McGuigan achieved solid growth
Brand McGuigan achieved solid growth driven by focus on quality and consumer promotions For personal use only Brand McGuigan Performance Total Sales = $59m YOY Case Growth = 15% YOY Net $ Sales Growth = 8% Key Awards: Neil McGuigan: Best White Winemaker in the World, 2009 International Wine Challeng
Slide 17: Brand Nepenthe also achieved good growth
Brand Nepenthe also achieved good growth assisted by major awards in UK Decanter Wine Show For personal use only Brand Nepenthe Performance YOY Case Growth = 5% YOY Net $ Sales Growth = 2% Key Awards: Ithaca Chardonnay 2007: Trophy for Best Chardonnay in the World at 2009 Decanter Awards Altitude Sa
Slide 18: Export sales growth around the world
Export sales growth around the world and well ahead of Australian wine industry For personal use only Branded 156% Non Branded/Bulk AVL Net Sales Growth vs Prior Year +98% +75% 67% 62% 67% 24% +2.4% +0.4% +13% N/A N/A 8% -15% UK Europe Asia USA Canada NZ Total Change in Value of -19% -18% +14% -0.6%
Slide 19: Achieving third strategy of maintaining low cost position
Achieving third strategy of maintaining low cost position and leveraging assets For personal use only • Winery costs $3.1m below last year and $6m below 2006/07 • Annualised headcount, discretionary and other costs cut by $7m • Inventory now in balance with stock/sales ratio 1.1 to 1 versus the indu
Slide 20: Strong operating cash flow and reduced debt
Delivered strong cash flow from operating activities and reduced our level of debt from December 2008 peak For personal use only Operating Cash Flow ($m) Level of Debt Net of Cash ($m) $30.0 $169.2 $17.7 $145.2 Second Half Yr Full Yr 08/09 Dec 31, 2008 Jun 30, 2009 08/09 20
Slide 21: AVL's restructuring almost complete and close to vision
AVL’s restructuring almost complete and close to vision 2005/06 2009/10 For personal use only Vineyard & 3rd • Total tonnes crushed 232KT • Forecast tonnes to be crushed 150KT Party Growers Wineries and • Tower Estate Winery investment Production • Hunter Estate 5KT • Hunter Valley 2KT • Griffith Wi
Slide 22: In summary
In summary For personal use only 1. Australian wine industry undergoing structural transformation 2. AVL has successfully faced up to new industry model 3. AVL outperforming the industry 4. AVL delivered on commitments: – sales targets – cash flow commitment – debt reduction 5. Now structurally well
Slide 23: Formal Proceedings
For personal use only FORMAL PROCEEDINGS IAN FERRIER 23
Slide 24: Accounts
Accounts For personal use only “To consider and receive the Financial Report, the Directors’ Report and the Auditor’s Report of the Company for the year ended 30 June 2009.” 24
Slide 25: Resolution 1
Resolution 1: For personal use only • To consider and if thought fit, pass as an ordinary resolution: • “That Richard Davis is elected as a director of the Company.” 25
Slide 26: Resolution 2
Resolution 2: For personal use only • To consider and if thought fit, pass as an ordinary resolution: • “That Ian Ferrier is re-elected as a director of the Company.” 26
Slide 27: Resolution 3
Resolution 3: For personal use only • To consider and if thought fit, pass as an ordinary resolution: • “That Brian McGuigan is re-elected as a director of the Company.” 27
Slide 28: Resolution 4
Resolution 4: For personal use only • To consider and if thought fit, pass as an ordinary resolution: • “That the Remuneration Report of the Company for the year ended 30 June 2009 be adopted.” 28
Slide 29: Resolution 5
Resolution 5: For personal use only • To consider and if thought fit, pass as an ordinary resolution: • “That for the purposes of Listing Rule 10.17 of the Australian Securities Exchange Listing Rules and Rule 109.1(1)(a) of the Company’s Constitution, the Company hereby determines that the maximum
Slide 30: For personal use only
For personal use only 30
Slide 31: Proxy position Resolution 1
Proxy position Resolution 1: For personal use only • Resolution 1: • That Richard Davis is elected as a director Total votes For Against Open lodged 64,409,277 62,427,553 615,628 1,366,096 96.9 % 1% 2.1 % 31
Slide 32: Proxy position Resolution 2
Proxy position Resolution 2: For personal use only • Resolution 2: • That Ian Ferrier is re-elected as a director Total votes For Against Open lodged 64,421,359 58,617,102 4,436,361 1,367,896 91.0 % 6.9 % 2.1 % 32
Slide 33: Proxy position Resolution 3
Proxy position Resolution 3: For personal use only • Resolution 3: • That Brian McGuigan is re-elected as a director Total votes For Against Open lodged 64,434,847 58,646,064 4,450,312 1,338,471 91.0 % 6.9 % 2.1 % 33
Slide 34: Proxy position Resolution 4
Proxy position Resolution 4: For personal use only • Resolution 4: • That the Remuneration Report of the Company for the year ended 30 June 2009 be adopted Total votes For Against Open lodged 64,343,474 61,485,128 1,496,047 1,362,299 95.6 % 2.3 % 2.1 % 34
Slide 35: Proxy position Resolution 5
Proxy position Resolution 5: For personal use only • Resolution 5: • That for the purposes of Listing Rule 10.17 of the Australian Securities Exchange Listing Rules and Rule 109.1(1)(a) of the Company’s Constitution, the Company hereby determines that the maximum total amount of cash fees that the C
Slide 36: For personal use only
For personal use only 36
Slide 37: FX a challenge
FX a challenge For personal use only AUD vs GBP (last 10 years) AUD vs USD (last 10 years) 37
Australian Vintage — Shareholder Meeting (November 2009) on 6ix