Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — Investor Presentation (June 2024)
25 slides from Treasury Wine Estates's investor presentation, Jun 20, 2024
Slide 1: Penfolds China Update Investor Presentation and Outlook
20 June 2024 ASX ANNOUNCEMENT Penfolds China Update Investor Presentation and Outlook Enclosed are the presentation materials for an investor and analyst webcast and conference call to be hosted by Treasury Wine Estates (ASX: TWE) commencing at 10:30am (AEST) on 20 June 2024. Links to register for t
Slide 2: Important Information
− TWE notes that the delivery of these long-term targets remains subject to a range of variable conditions. Outlined below is important information regarding the risk factors related to these targets Important Information This presentation contains information that is based on projected and/or estim
Slide 3: Penfolds China Update
Penfolds China Update 20 JUNE 2024
Slide 4: Important Information
IMPORTANT INFORMATION All references to ‘$’ throughout this presentation refer to Australian Dollars, unless marked otherwise. This presentation contains information that is based on projected and/or estimated expectations or assumptions. Forward looking statements are subject to a range of risk fac
Slide 5: Tim Ford, Chief Executive Officer, Treasury Wine Estates
TIM FORD CHIEF EXECUTIVE OFFICER TREASURY WINE ESTATES
Slide 6: Today's Presenters
TODAY’S PRESENTERS TIM FORD TOM KING CHIEF EXECUTIVE OFFICER MANAGING DIRECTOR Treasury Wine Estates Penfolds
Slide 7: Agenda
AGENDA KEY UPDATES & OUTLOOK Tim Ford CHINA STRATEGY UPDATE Tom King Q&A Tim Ford, Tom King, Stuart Boxer
Slide 8: Key Updates
KEY UPDATES INITIAL PORTFOLIO DEMAND GLOBAL PRICE INCREASES V24 A RECORD INTAKE FOR IN CHINA HAS BEEN STRONG HAVE BEEN FINALISED THE BIN & ICON PORTFOLIO • Shipments of Australian wine • Price increases have been finalised • The 2024 Australian vintage has commenced at the end of March, with across
Slide 9: Penfolds Outlook
PENFOLDS OUTLOOK F24 F25 F26/27 • Penfolds EBITS are expected to be • Penfolds expects to deliver low double- • Penfolds will target annual EBITS growth delivered in the range of $418-421m, digit EBITS growth: of approximately 15% across both years, driven by strong top-line growth across all – Top-
Slide 10: Tom King, Managing Director, Penfolds
TOM KING MANAGING DIRECTOR PENFOLDS
Slide 11: Our Ambition in China
OUR AMBITION IN CHINA IN LUXURY WINE IN AUSTRALIAN IN US LUXURY WINE LUXURY WINE IN FRENCH & CHINESE LUXURY WINE
Slide 12: The Elements That Will Underpin Our Ambition
UNRIVALLED GLOBALLY STRONG BRAND DISCIPLINED, EFFICIENT RTM, SOURCED PORTFOLIO HEALTH PRODUCT FLOW VISIBILITY THE ELEMENTS THAT WILL UNDERPIN OUR AMBITION DIGITALLY ENABLED, INVESTMENT IN LOCAL LOCAL CROSS- DATA COMPLIANT SOURCING AND FUNCTIONAL TEAM PRODUCTION 10
Slide 13: The Luxury Wine Market in China Presents a Significant Long-Term Growth Opportunity
THE LUXURY WINE MARKET IN CHINA PRESENTS A SIGNIFICANT LONG - TERM GROWTH OPPORTUNITY FOR PENFOLDS By 2030, China is expected to account for 24- China currently ranks 5th globally for Luxury Wine category penetration is low at 3.6% 26% of the world’s Luxury goods consumption, wine sales, and is fore
Slide 14: Our China Strategy Is Aligned With Our Global Strategic Priorities
OUR CHINA STRATEGY IS ALIGNED WITH OUR 3 GLOBAL STRATEGIC PRIORI TIES SCALE OUR LUXURY STATUS GROW DISTRIBUTION OPTIMISE THE PORTFOLIO TO DRIVE DEMAND & AVAILABILITY FOR LONG TERM GROWTH RECRUIT & RE-RECRUIT …IN THE RIGHT PLACES… …WITH THE THE CONSUMER… RIGHT PORTFOLIO. • Deep understanding of our t
Slide 15: Based on Research, We Know Our Target Consumers
BASED ON RESEARCH, WE KNOW OUR TARGET CONSUMERS AND UNDERSTAND THEIR RELATIONSHIP WITH WINE AND A LUXURY LIFESTYLE CLASSIC CONNOISSEURS NEW LUXURIANS THESE GROUPS; (High Wine Involvement, 40+) (Medium Wine Involvement 18-44) • Represent 75% of the Super luxurious mid-lifers, living to the Ambitious,
Slide 16: Six Demand Zones Which Present the Most Significant Growth Opportunities
WE HAVE IDENTIFIED SIX DEMAND ZONES WHICH PRESENT THE MOST SIGNIFICANT GROWTH OPPORTUNITIES FOR PENFOLDS HEARTLAND CONNECTION BUSINESS TIME TO DINING ENTERTAINING SAVOUR NEW GROWTH DELIGHTFUL RELAX AND IMPRESSIVE DINNER TOGETHER REWARD NIGHT OUT Source: Independent Research, commissioned by TWE, aut
Slide 17: We Will Bring Penfolds Wines From the Most Revered Wine Regions to Consumers
WE WILL BRING PENFOLDS WINES, FROM THE MOST REVERED WINE REGIONS GLOBALLY, TO CONSUMERS ACROSS CHINA AUSTRALIA US FRANCE CHINA CHAMPAGNE The origins of Penfolds House From vine cuttings planted in The French inspired the Penfolds house style explores A history of Australian Style and DNA. W here it
Slide 18: Penfolds Brand Equity Metrics Remain Strong in China
PENFOLDS BRAND EQUITY METRICS REMAIN STRONG IN CHINA BRAND HEALTH ELEMENTS 60% Aware 56% Penfolds Demand Power* remains very high in China, only just below Penfolds 59% home market of Australia. Consideration 55% 58% Familiar 53% 18% Favourite 12% Penfolds 16% Loyal Top 10 Brands 11% AUSTRALIA CHINA
Slide 19: F25 Brand Investment Will Elevate the Re-Establishment of Our Australian COO Portfolio
F25 BRAND INVESTMENT WILL ELEVATE THE RE-ESTABLISHMENT OF OUR AUSTRALIAN COO PORTFOLIO IN CHINA SCALEABLE MASTERCLASS COLLECTION LAUNCH & PR & PARTNERSHIPS TO GIFTING ACROSS RECRUITMENT WITH TO DRIVE EDUCATION 180 ANNIVERSARY SUPPORT LUXURY STATUS KEY OCCASIONS ENTRY LEVEL TIERS & COO MESSAGING REFR
Slide 20: Our Tailored Network of Distribution Partners Provides Exceptional Channel Coverage
OUR TAILORED NETWORK OF DISTRIBUTION PARTNERS PROVIDES US WITH EXCEPTIONAL CHANNEL COVERAGE NATIONAL REGIONAL DISTRIBUTOR DISTRIBUTOR EXCLUSIVITY ACROSS SELECTED CORE PORTFOLIO PRODUCTS DEFINED GEOGRAPHIC NATIONAL COVERAGE COVERAGE RETAIL ON PREMISE LIQUOR STORE CORP CLIENTS E-COMMERCE 18
Slide 21: Our Experienced, Local Team Remains in Place
OUR EXPERIENCED, LOCAL TEAM REMAINS IN PLACE, AND WE WILL BE INVESTING FURTHER IN F25 TO SUPPORT OUR GROWTH AMBITIONS Support 10% TARGET F25 CHINA TEAM SIZE Corporate 19% Sales PROPORTION 48% EXPERIENCED LOCAL OF TARGET F25 LEADERSHIP TEAM INVESTMENT BY FUNCTION AVERAGE LEADERSHIP TENURE Marketing 2
Slide 22: China Leadership Team
JACK WU CHRISTY IU CAROLINE CHENG MAGGIE YANG General Manager Marketing Director Director Commercial Finance Director Tenure 9.5 yrs Tenure 12 yrs Strategy & Planning Tenure 5 yrs Tenure 4.5 yrs CHINA LEADERSHIP TEAM JESSICA LIU CHEN MA CRIS LI LARRY LIN Head of People & Culture Director Public Affa
Slide 23: Our Asset Base Is Well Positioned To Support Growth
OUR ASSET BASE IS WELL POSITIONED TO SUPPORT GROWTH VINEYARDS AND SOURCING WINEMAKING AND PACKAGING • $100m invested in Australia for vineyard replanting and acquisitions • $165m invested in TWE’s Barossa Winery between F18-22, focused since F18, enabling an increase in the intake of Luxury grade fr
Slide 24: Summary
SUMMARY • Our clear ambition is to be the number one Luxury wine brand in China • China remains an attractive Luxury wine market and a significant long-term growth opportunity for Penfolds • Penfolds is well placed to capitalise on the opportunity in China: – A deep understanding of the Luxury wine
Slide 25: Definitions
DEFINITIONS CAGR Compound annual growth rate Commercial wine Wine that is sold at a price point below A$10 (or equivalent) per bottle COO Country of origin EBITS Earnings before interest, tax, material items and SGARA FXX Financial year ending 30 June 20XX Luxury wine Wine that is sold at a price po
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