Diamond Estates Wines & Spirits, Inc. · TSXV:DWS
Diamond Estates Wines & Spirits — Shareholder Meeting (September 2023)
21 slides from Diamond Estates Wines & Spirits's shareholder meeting presentation, Sep 6, 2023
Slide 1: President's Report
President’s President’sReport Report President’s Report Annual General Meeting September 6, 2023
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: Three estate wineries and one cidery in Ontario
Three estate wineries and one cidery in Ontario - Lakeview Wine Co, Creekside Estate, Queenston Mile, Shiny Apple One estate winery in BC - Backyard Vineyards National agency importing, marketing and selling premium alcoholic beverages from around the world
Slide 4: Executive Summary
Executive Summary Business Performance • Consumers are cutting back on dining out and alcohol to afford the essentials • Diamond grew +6% and outpaced industry in every category • Grocery strength further enhanced as competitive advantage • Redesigned Lakeview portfolio, Mindful launch success and S
Slide 5: Industry Softness Driven by Consumer Confidence Issues
Industry Softness Driven by Consumer Confidence Issues Consumers are cutting back on dining out and alcohol to afford the essentials
Slide 6: Agency out-performing soft industry in all categories
Agency out-performing soft industry in all categories Diamond performance outpaced industry in every category Trajectory Beverage Group Performance +5.3% -0.7% +0.3% +5.6% Category growth -5.2% -0.9% +0.4% -4.8%
Slide 7: Ontario Grocery strength further enhanced as competitive advantage
Ontario Grocery strength further enhanced as competitive advantage On a Rolling 3 and 6 month basis: - Trajectory is the #3 Agency and the #2 VQA Agency. - Twenty Bees posted steady growth and is now tied for the #1 VQA Brand Source: Ontario liquor board shipment data. May 2023. LY= last year. TY= t
Slide 8: Winery Success Stories
Winery Success Stories Redesigned portfolio, Mindful success and Shiny turnaround driving winery growth Mindful has now exceeded Fresh Sparkling Trending! Twenty Bees #1-2 VQA Shiny is back in full force! $1 Million in sales +35% R6, +40% R12 Grocery Brand +114% R3
Slide 9: We Make Great Wine – winning Prestigious Awards
We Make Great Wine – winning Prestigious Awards EastDell Pinot Grigio wins Platinum at National Wine Awards and most affordable @$14.95
Slide 10: Ontario Retail Modernization
Ontario Retail Modernization Increased Ontario Grocery and Convenience store distribution combined with reduced tax and enhanced financial support anticipated shortly • Ontario government listening to a convincing argument of an industry with significant economic contribution potential that has been
Slide 11: A dynamic and growing list of On-Premise customers
A dynamic and growing list of On-Premise customers
Slide 12: CK Mondavi – our California portfolio
CK Mondavi – our California portfolio Mondavi’s recent launch in Canada demonstrating growth potential Now our core California portfolio, we believe this Brand can grow to 100k+ cases
Slide 13: More CK Mondavi – Flat Top Hills and Charles Krug
More CK Mondavi – Flat Top Hills and Charles Krug Premium offerings provide upward range and compete with the largest California brands Charles Krug provides further credibility as the oldest operating Napa Estate Winery Premium Range - $19.95 Super Premium Range - >$30.00
Slide 14: Significant Agency New Business Wins
Significant Agency New Business Wins New business pitches in progress with aggressive business development
Slide 15: Fiscal 2023 Financial Review
Fiscal 2023 Financial Review • Continued Revenue growth despite a soft industry • Growth drivers: EWG/Shiny acquisitions, Grocery, On Premise resurgence • GM decline driven by $1.7M inventory overhead adjustment (2022 severe short crop) • Expenses +5.4 points with HR costs, A&P and G&A driving incre
Slide 16: Balance Sheet
Balance Sheet • Current Assets declined $4.7M with Inventory and A/R reductions ($2.6M and $2.0M respectively) • Other Assets declined $1.5M driven by amortization • Liabilities increased $1.8M driven by Debentures payable Balance Sheet As at March 31, 2021 As at March 31, 2022 As at March 31, 2023
Slide 17: Q1 F24 Financial Review
Q1 F24 Financial Review • Revenue grew driven by a $0.8M bulk wine sale at BackYard Vineyards • GM decreased slightly with the low margin bulk wine sale and general COGS increases • EBITDA remained flat vs prior year • Net Income decreased $0.8M driven by interest rates and the $4.7M convertible deb
Slide 18: Comprehensive Revitalization Plan
Comprehensive Revitalization Plan In addition to continued core business growth, significant adjustments being made to capital and cost structures: • Debt reduction program: 1. Private Placement 2. Sales of non-strategic assets • Deutsch Mitigation Plan
Slide 19: Private Placement
Private Placement • $9M Lassonde investment provides stability, credibility and strength • $2M additional available @ $.45 per share • Closing date anticipated within 30 days coincident with bank agreement • Lassonde becomes majority owner with strong commitment to support business
Slide 20: Debt Reduction and Deutsch Mitigation Plan
Debt Reduction and Deutsch Mitigation Plan Debt Reduction • $6M of Lassonde investment (remaining $2M to working capital) • $9.3M asset disposition plan in place Deutsch (Josh) Mitigation Plan • Significant fixed expense reduction ($1.5-$2M) • Organic growth of current Agency Suppliers • Aggressive
Slide 21: This has been a difficult year in the beverage alcohol industry
This has been a difficult year in the beverage alcohol industry. We are fortunate for our investor group support allowing us to revitalize the Diamond Estates business.
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